Smith & Nephew Denies In M&A Talks, Shares Fall
January 14 2011 - 7:57AM
Dow Jones News
U.K.-based Smith & Nephew PLC (SN.LN) took the unusual step
Friday of denying it was in any takeover talks after market
speculation pushed shares in Europe's largest maker of replacement
knees and hips to record highs.
"Smith & Nephew has a long-standing policy of not commenting
on press speculation, unless there is a regulatory obligation to do
so. However, exceptionally, Smith & Nephew wishes to clarify
that it is not engaged in any discussions which could lead to a
merger or a takeover," the company said in a statement issued
through the London Stock Exchange.
Companies are obliged by British takeover rules to inform the
market of an approach if the news leaks and influences its
shares.
The company issued the denial after U.K. newspaper The Daily
Telegraph Friday said privately owned U.S. orthopaedics group
Biomet Inc. (BMET) was set to begin informal talks with Smith &
Nephew about a potential GBP15 billion merger.
Smith & Nephew has been the subject of persistent takeover
speculation for years, with U.S. rivals in the market for
replacement hips and knees like Biomet, Medtronic, Inc. (MDT) and
Zimmer Holdings Inc. (ZMH) frequently touted as possible
suitors.
The latest spurt of investor interest in the stock came Monday
after Sky News reported that Johnson & Johnson (JNJ) had
approached Smith & Nephew in December with a proposal pitched
at 750 pence a share, valuing the company at roughly GBP7 billion.
It didn't say from where it got the information. Smith & Nephew
didn't comment on the report.
But resulting activity pushed Smith & Nephew's share price
to an all-time-high of 739 pence Monday.
The share price fell back Friday after Smith & Nephew denied
it was in M&A talks, and at 1226 GMT, stood 0.8% lower on the
day, or down 5 pence at 679 pence.
-By Sten Stovall, Dow Jones Newswires; +44 207 842 9292;
sten.stovall@dowjones.com
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