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news.Guidant Corporation has announced that it believes the latest takeover offer of $27.2 billion from Boston Scientific to be superior to the $24.2 billion offer from Johnson & Johnson that it recently accepted.
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The new Boston Scientific offer represents a valuation of $80 per Guidant share, which would take the form of $42 cash and $38 in Boston Scientific stock.
“We are providing Guidant shareholders with certainty of completion, significant upside potential and substantially more value today than the Johnson & Johnson transaction. By any objective measure, our offer is clearly superior to Johnson & Johnson’s,” said Pete Nicholas, chairman of Boston Scientific.
The offer also involves the healthcare company Abbott Laboratories, which has come to an agreement with Boston Scientific to acquire the vascular business of Guidant for $4.1 billion should Boston Scientific complete its acquisition.
Abbott will also help Boston Scientific to finance its deal by providing it with a $900 million loan, and also plans to purchase approximately 4% of the combined company for $1.4 billion.
Many analysts have begun to question the ever-increasing valuation of Guidant, and speculation now abounds that J&J may now look elsewhere to boost its future product line, with St Jude Medical seen as a possible target.
J&J first agreed a fee of $25.4 billion for Guidant in December 2004, but safety concerns and product recalls during the summer of 2005 lead to the companies eventually agreeing a revised figure of $21.5 billion in November.
The bidding war for the company then began in December when Boston entered the equation with an offer of $24.6 billion. The companies have since traded offers culminating in the $27.2 billion offer from Boston now on the table.