NEW YORK (TheStreet) -- Shares of Smith & Nephew plc (SNN) are higher by 10.44% to $38.41 on heavy volume in mid-afternoon trading on Tuesday, after Bloomberg reported that Stryker Corp. (SYK) is planning to issue a takeover offer for the U.K-based medical device maker.
Stryker, a U.S producer of surgical instruments, is said to be offering a "significant premium" to Smith & Nephew's current share price, sourced told Bloomberg.
Stryker is not planning a tax inversion the sources told Bloomberg, due to the risk, and limited tax benefits.
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The sources added that the bid is still being finalized, and that the timing of the offer could change, or no offer could be issued.
Companies that produce medical devices are looking to merge as insurers and hospitals are seeking out better prices from suppliers in order to overcome rising costs, Bloomberg noted.
Separately, TheStreet Ratings team rates SMITH & NEPHEW PLC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate SMITH & NEPHEW PLC (SNN) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income."