NEW YORK (TheStreet) -- Shares of Smith & Nephew (SNN) surged in London but are down 2.44% to $37.11 in pre-market trading in New York after people familiar with the matter said that Stryker Corp. (SYK) is planning a takeover offer for the U.K. medical device maker that could happen in the coming weeks, Bloomberg reports.
Stryker, a U.S. producer of surgical implants, plans to offer a significant premium to Smith & Nephew's share price, with one of the people saying it could be about 30%. Smith & Nephew gained as much as 9.7% and was up 7.4 % recently. That takes the gain this year to 36% and values the company at about 10.5 billion pounds ($16.3 billion), Bloomberg said.
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Stryker, based in Kalamazoo, MI, is not planning a tax inversion because of the limited tax benefits and political risk, said one of the people, Bloomberg added. The U.S. government is clamping down on those types of deals to stop companies from moving their addresses abroad to cut taxes.
The bid is still being finalized and the timing could change, said the people. There's also a chance that Stryker may decide against an offer, according to Bloomberg.
Stryker shares closed up 1.71% to $96.61 yesterday.