First, Johnson and Johnson became smitten with Guidant. Unfortunately, it turns out she wasn’t the most virginal of brides, what with some faulty products and all. Cold-footed J&J tried to squirm out of the deal. Guidant threatened to bear it’s legal teeth should J&J actually leave her standing, so J&J decided to come through with a revised offer. Just when we thought we were through covering the issue, Boston Scientific comes out of nowhere:
Boston Scientific made an unexpected $25 billion takeover offer Monday for the troubled medical device maker Guidant, more than $3 billion more than what Johnson & Johnson agreed to pay for Guidant last month.
Boston Scientific said it was prepared to sell Guidant’s stent business to satisfy regulators but wanted to retain some shared rights in Guidant’s drug-eluting stent program, which has not yet brought a product to market. Boston Scientific has one of the bestselling drug-eluting stents on the market in Taxus, which competes with the Cypher stent made by J&J’s Cordis Corp. unit.
Boston Scientific, which makes heart devices, offered in a letter to Guidant’s chairman to pay a combination of cash and stock worth about $72 per Guidant share. It said that is nearly 14 percent above Friday’s value of J&J’s revised cash-and-stock deal for Guidant.
The offer comes nearly a year after J&J said it would buy the Indianapolis medical-device maker for $25.4 billion. But J&J cut its offer by nearly $4 billion after a series of product recalls by Guidant, and Guidant management accepted the lower price last month.
Boston Scientific executives said the prospect of entering the lucrative $10 billion market for implantable pacemakers and defibrillators by purchasing Guidant outweighs the legal risks posed by Guidant’s recent problems.
“We understand there have been some recent issues, but we believe they are manageable,” Boston Scientific Chief Operating Officer Paul LaViolette said in an interview with The Associated Press.
How cute, Boston Scientific is willing to see past Guidant’s mistakes to the true beauty underneath. What does J&J think of this intrusion?
A Johnson & Johnson spokesman did not return three calls seeking comment Monday.