Stryker deal talk boosts Smith & Nephew share price

Tom Beck
Smith & Nephew manufactures surgical devices (Source: Getty)
US-based medical device company Stryker is reportedly examining the purchase of Smith & Nephew, the British manufacturer of surgical devices for orthopaedic construction.

Yesterday Smith & Nephew’s stock jumped 4.4 per cent to 1,138p.

The news came despite Stryker denying in May that it had any intention of making a bid for Smith & Nephew.

Regulatory requirements prevented the company from making a bid for the following six months, a time period which is set to end on Friday.

While shareholders viewed the news positively, Morgan Stanley analyst David Lewis said: “While many expect Stryker to acquire Smith & Nephew, we are not convinced… The balance sheet is an important driver of the Stryker return story, but we see a more growth-focused path that does not require Smith & Nephew and certainly not now.”

Lewis said his analysis “suggests that a hypothetical transaction would dilute Stryker’s organic growth”.

A spokesperson for Smith & Nephew said the company “does not comment on rumour or speculation”.

Stryker, which cannot comment on the reports until Friday’s deadline passes, is reportedly considering a so-called inversion deal, which would mean the Michigan-based company moving its headquarters outside the US to escape high corporation tax. Stryker shares climbed 1.43 per cent.

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