Shareholder Views 'Anything Less than $71 Per Share from J&J' As Unacceptable NEW YORK, Jan. 10 /PRNewswire/ -- Elliott Associates, L.P. (together with funds under common management), a shareholder of Guidant Corporation (NYSE:GDT), today sent a letter to the Board of Directors of Guidant. Elliott encourages other shareholders to communicate publicly or privately to Guidant's Board concerning their views regarding the superiority of the Boston Scientific bid and the minimum acceptable level of consideration that Johnson & Johnson must now offer to acquire Guidant. The letter sent to Guidant's Board is as follows: January 10, 2006 Board of Directors Guidant Corporation 111 Monument Circle 29th Floor Indianapolis, Indiana 46204-5129 Dear Members of the Board of Directors: I write to you on behalf of Elliott Associates, L.P. and Elliott International, L.P. ("Elliott" or "we"), which collectively own approximately three million shares of the common stock of Guidant Corporation (the "Company" or "Guidant"). Elliott strongly believes that the Boston Scientific offer of $72 per share in cash and stock (the "Superior Offer") is superior to the Johnson & Johnson ("J&J") cash and stock offer valued currently at approximately $64.30.(1) In addition to consideration being approximately 12% higher than that offered by J&J, Boston Scientific has protected its offer's value through a collar around the stock portion.(1) Further, Boston Scientific's Superior Offer is not subject to any due diligence or financing, and the material adverse condition language in the delivered merger agreement is "essentially the same" as in the current merger agreement between Guidant and J&J, putting its offer on equal footing with J&J's.(2) Additionally, approximately 30 percent of Boston Scientific's shareholders have agreed to vote in favor of the transaction, easing any Boston Scientific shareholder vote concerns. Finally, the fact that Boston Scientific has taken the extraordinary step of entering into an agreement with Abbott Laboratories to divest Guidant's vascular intervention and endovascular solutions businesses this early in the process should mitigate the incremental antitrust risk associated with Boston Scientific's offer as compared to J&J's. The combination of these factors overwhelmingly outweighs the facts that a transaction with J&J would be able to close a couple of months earlier and that it has already received antitrust clearance. It is beyond our comprehension how J&J can view their current deal as being superior to Boston Scientific's, and we would expect your view to be the same.(3) In fact, for J&J to match Boston Scientific's Superior Offer, it would have to offer no less than $71.00 per share, in our opinion. Given the strength of Boston Scientific's merger agreement and the lack of any antitrust issues, the only difference between the two offers should be the time value of money coupled with a very modest risk premium. Notably, J&J's own press release mentions only three factors as to why it considers its proposal superior to Boston Scientific's: (i) J&J's ability to invest in Guidant's future; (ii) the "certainty and imminence" of J&J's proposal; and (iii) J&J's historical record of sales and earnings growth. While we have no doubt that J&J would invest in Guidant's future, so will Boston Scientific, and Guidant shareholders should be compensated for their current holdings now -- promises of future investment do not justify insufficient consideration today. Secondly, the "certainty and imminence" of J&J's proposal only represents approximately a two-month timing advantage, as Boston Scientific has already taken necessary steps to expedite its closing and has gone to great lengths to address any potential antitrust issues upfront. Finally, J&J is facing a meaningful slowdown in future growth, absent its pending acquisition of Guidant, while the combination of Boston Scientific and Guidant would create a diversified medical device powerhouse with revenues of $10 billion growing at annual double-digit rates and deserving of meaningful earnings multiple expansion over time. Should J&J propose to increase its offer to $71.00 or higher, we urge you not to increase the current breakup fee or agree to a "forced vote" provision as part of entering into a new merger agreement. It is paramount that you, as our fiduciaries, create an even playing field for both parties and maximize the chances of Guidant's shareholders receiving the highest possible value for their investment. As we communicated to the Company shortly after the terms of the revised agreement with J&J were disclosed, it continues to be our strong belief that a $64 per share offer from J&J meaningfully undervalues Guidant. Taking into account all of these factors, we strongly urge Guidant's board to recognize the superiority of Boston Scientific's offer versus J&J's and, just as importantly, to ensure a level playing field should J&J increase its offer. Anything less than $71.00 per share from J&J should not be accepted, in our view. Finally, I would like to use this opportunity to extend my gratitude to all the hard working Guidant employees who have remained committed to the Company and its mission of developing life saving cardiovascular devices despite recent problems and negative press coverage. Should you have any questions, please do not hesitate to contact me. Very truly yours, /s/ Ivan Krsticevic Ivan Krsticevic Senior Portfolio Manager (1) Based on closing prices as of January 9, 2006. (2) Per Larry Best, CFO of Boston Scientific, on their conference call January 9, 2006. (3) As stated in J&J's press release in response to Boston Scientific's offer on January 8, 2006, "We continue to believe that the agreed upon J&J deal represents a better offer for Guidant Corporation, its shareholders and its employees than the recently announced Boston Scientific proposal." About Elliott Associates, L.P. Elliott Associates, L.P. and its sister fund, Elliott International, L.P. have more than $5.6 billion of capital under management as of January 1, 2006. Founded in 1977, Elliott Associates is one of the oldest hedge funds under continuous management. The Elliott funds' investors include large institutions, high-net-worth individuals and families, and employees of the firm. DATASOURCE: Elliott Associates, L.P. CONTACT: Scott Tagliarino for Elliott Associates, L.P., +1-212-506-2999, +1-917-922-2364 (cell)

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