Shares in medical equipment group Smith & Nephew surged eight per cent this morning, valuing the business at £10.4bn on the back of reports of a possible takeover by US group Stryker.
Stryker, a US surgical implants manufacturer, denied it has any intention to buy the company back in May. However, Last month, it was reported that Stryker is examining an acquisition of the British manufacturer of surgical devices for orthopaedic construction.
Regulatory barriers also prevented the company from making a bid for the following six months. On Wednesday, Bloomberg reported people familiar with the matter had confirmed Stryker is planning a bid for the UK company.
Stryker is not planning a tax inversion thanks to the small gains it would make and the large political risk. However, the Michigan-based company is planning to offer a substantial premium for Smith & Nephew. One source said the premium could be in the region of 30 per cent.
People familiar with the discussions added that the bid was still being finalised and the timing was not certain. The chairman of Smith & Nephew, Roberto Quarta, is also the incoming chairman of WPP.
(Source: Hargreaves Lansdown)