This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Smith & Nephew Falls After Wells Says Medtronic Bid Unlikely

Stocks in this article: SSN MDT SYK BSX

NEW YORK (TheStreet) -- Shares of British orthopedic device maker Smith & Nephew ( (SNN)) are falling after Wells Fargo said it doesn't think that Medtronic ( (MDT)) will look to buy the company. Earlier this week, Bloomberg reported that Medtronic, which makes various medical devices, was considering bidding for Smith & Nephew.

WHAT'S NEW: After speaking with management at the company's investor day, Wells Fargo analyst Larry Biegelsen reported that Medtornic said it would only enter a new market in which it believes it can be a top player. Smith & Nephew's hip and knee business is not large enough to fit those criteria, the analyst stated. Additionally, Medtronic did not seem eager to take advantage of the tax reduction that a Smith & Nephew acquisition could bring, Biegelsen stated. Conversely, research firm Summer Street believes that a bidding war for Smith & Nephew could erupt between Medtronic and Stryker ( (SYK)), which said last week that it does not intend to make an offer for the British company at this time, but reserved the right to make a future bid. Summer Street raised its price target on Smith & Nephew to $112 from $100 and kept a Buy rating on the stock. Additionally, the firm thinks that if Stryker is not able to buy the British company, it could look to acquire another large cap name in the space. Boston Scientific ( (BSX)) could be a top target for Stryker, according to Summer Street. Meanwhile, Lisa Clive, an analyst at research firm Bernstein, wrote that Smith & Nephew would try to oppose a takeover. Clive thinks the company could take several steps to defend itself, and she believes that these measures will deliver significant shareholder value in the near to medium term. The analyst kept an Outperform rating on the shares.

WHAT'S NOTABLE: Medtronic stated in slides earlier today that it would only pursue acquisitions that reduce its earnings minimally or not at all, and have risk adjusted returns that are at least in the mid teens.

PRICE ACTION: In early trading, Smith & Nephew fell 3.4% to $94. Shares of Medtronic are down 2% to $61.88 while Stryker is little changed at $85.27.

The Fly provides comprehensive coverage of stock news and Street research and delivers it in real-time. The Fly breaks market-moving news and explains sudden stock movements in a rapid-fire, short-form story format. Follow @theflynews on Twitter. For a free trial, click here.

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,678.70 +6.10 0.03%
S&P 500 2,057.09 +5.27 0.26%
NASDAQ 4,771.7630 +13.8840 0.29%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs