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news.Boston Scientific has moved to hijack Johnson & Johnson's proposed acquisition of Guidant Corporation. Boston is proposing to purchase the medical device maker for approximately $25 billion, a premium of approximately $3.5 billion over the current J&J bid.
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Boston Scientific is proposing to pay $72 per Guidant share in a combination of cash and stock, a price which is approximately 14% higher than the $63.43 value proposed in the revised merger agreement between Guidant and J&J.
In December 2004 J&J had agreed to pay $25.4 billion for Guidant. However, product recalls at Guidant and associated litigation led the companies to agree a revised deal in November 2005 under which J&J negotiated a reduction of almost $4 billion on the original deal.
If Boston Scientific and Guidant enter into a definitive agreement by the end of the year, it is anticipated that the proposed transaction will close in the first quarter of 2006.
“The combination of Guidant and Boston Scientific will create the world’s leading cardiovascular device company accelerating diversification and growth,” said Pete Nicholas, chairman of Boston Scientific. “Moreover, the financial benefits of this proposal are compelling for Guidant shareholders, as our proposal provides superior value over that provided by the transaction between Guidant and J&J.”