Smith & Nephew Poised to Bid for Biomet

Whoa, this is big. The Financial Time‘s Alphaville is reporting that Smith & Nephew is in merger talks with Biomet (BMET). Coming after Golden West Financial, this would be our second Buy List merger of the year.

Smith & Nephew is in preliminary merger discussions with Biomet, its US rival best known for its artificial hips and other replacement joints, in a deal that could double the size of the British healthcare group. While sources stressed last night that the talks were at a very early stage, the deal is aimed at creating an orthopaedic specialist worth up to $20bn and capable of competing against the US sector leaders, Zimmer and Stryker.
Morgan Stanley, Biomet’s financial adviser, was drafted in to work on the company’s options in the spring following the sudden resignation of its co-founder and president, Dane Miller. Biomet is believed to have also held discussions with JPMorgan private equity.
S&N is valued at £4.8bn ($9.2bn), while Biomet’s market cap is $8.9bn. S&N would likely demerge Biomet’s dental business, which has been valued at $2bn. Zimmer has been mooted as a possible buyer.

Biomet is up big today. My hope is that they accept nothing less than $45 a share.

Posted by on December 11th, 2006 at 10:32 am


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