It’s Not Over

The drama continues….
Every time I think the battle for Guidant (GDT) is over, it jumps to life again. This is getting to be like That 70’s Show—it just doesn’t know when to end.
The latest is that Boston Scientific (BSX) just made a counteroffer. They’re now bidding $73 a share for GDT, one dollar a share more than Johnson & Johnson (JNJ).
I have to give BSX points for bravery, if not fiscal prudence. Let’s be clear: They simply can’t afford Guidant. JNJ is an enormous company. It’s roughly ten times larger than BSX. Boston Scientific is desperate, and it’s beginning to show. Even though Boston Scientific is offering more, they’re using more stock. They have to. But JNJ has a bottomless bank account.
It’s clear to me that the Guidant folks want to go with JNJ, but the hedge funds are in BSX’s corner (or rather, vice versa). The board can accept a lower offer if it think the offer in the shareholders’ best interest. Personally, I think Guidant is going to be trouble at any price.
The ball’s now in JNJ’s court. (Just between you and me, isn’t this getting kinda fun?)

Posted by on January 12th, 2006 at 11:13 pm


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