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No Word From Guidant, J&J

The merger doesn't seem to have closed, two days after Guidant said it must.
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Two days ago,




Johnson & Johnson

(JNJ) - Get Free Report

, balking at the companies' original merger pact after a series of recalls at the medical device maker, was required to complete the $25.4 billion acquisition -- within two business days.

That would appear to mean the deadline was Friday, Nov. 4, but to this point, nothing seems to have happened, and neither company has offered any additional information. Of course, that isn't exactly a surprise considering their reluctance to discuss the merger in recent months.

Johnson & Johnson had said Wednesday after the Federal Trade Commission conditionally cleared the deal that it "continues to view the previously announced product recalls at Guidant and the related regulatory investigations, claims and other developments as serious matters affecting both Guidant's short-term results and long-term outlook."

The company added that those events "have had a material adverse effect on Guidant," meaning, in Johnson & Johnson's opinion, that it wasn't required to close the acquisition.

Guidant had a considerably different take, saying at the time that Johnson & Johnson was "legally obligated" to complete the transaction. Under the terms of the companies' agreement, Guidant said, Johnson & Johnson had to make the union official within two days of getting the government's green light.

Johnson & Johnson agreed last December to buy Indianapolis-based Guidant for $76 a share. Then, this year, Guidant was hit by product recalls and regulatory matters. Johnson & Johnson, of New Brunswick, N.J., let the weeks and months go by saying very little about Guidant's troubles and their possible effect on the merger, before offering in mid-October that it would "consider alternatives" to the agreement.

Afterward, Johnson & Johnson resumed its silence, breaking it only this week when the FTC said the transaction could go forward, provided the company divested some of the rights and assets of certain businesses. The company also said it and Guidant had held talks over the terms of the deal, but that no agreement was reached.

"Johnson & Johnson cannot assure that the companies will resume

the discussions or, if discussions do resume, whether they will be able to reach agreement on revised terms that would allow Johnson & Johnson to proceed with the transaction," the company said two days ago.

Guidant's shares have traveled an uneven path since the company's recalls began, closing Friday at $58.92. The stock was up $1.35, or 2.3% on the day, but it's still more than $17 below the price Johnson & Johnson agreed to pay last year. For its part, Johnson & Johnson lost 32 cents, or 0.5%, to close at $60.88.