Another Smith & Nephew Rumor; Different This Time?
Recurring rumors that medical equipment-maker Smith & Nephew PLC (NYSE: SNN) might be acquired by a larger competitor resurfaced Wednesday in a big way.
The most recent rumor, denied by supposed acquirer Striker (NYSE: SYK), comes against a backdrop of the pending $13.35 billion acquisition within the same sector of privately held Biomet by Zimmer (NYSE: ZMH).
The pending deal by competitors "may force Stryker to look for more scale," said Dr. Mark Landy, analyst at Summer Street Research Partners. "Acquisitions beget acquisitions and drives speculation and rumor."
Off and on rumors regarding Smith & Nephew have been heard for more than a decade. Landy said Smith & Nephew is indeed an attractive acquisition target.
"They might just lack a little bit of scale to be as competitive as they'd like when going up against Johnson & Johnson, Stryker and Zimmer," said Landy.
The Financial Times reported the latest rumor Wednesday. Stryker denied the report in response to an inquiry from British securities regulators.
Stryker's denial said that under British rules, it can't announce an offer or possible offer for Smith & Nephew or make any statement that raises the possibility that such an offer might be made for six months, unless a third party announces "a firm intention to make an offer" for Smith & Nephew.
Smith & Nephew was last trading at $82.60, up 2.81 percent.
Stryker was changing hands around $82.92, up 3.17 percent.
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