Boston – If Boston Scientific Corp. prevails in a bidding war for rival medical device maker Guidant Corp., the $25 billion deal would quadruple its debt load, hurt its near-term earnings and add to the company’s recent legal and regulatory troubles. The payoff would be entry into a rapidly expanding segment of the devices market.
Its adversary for Guidant, health care company Johnson & Johnson, said Tuesday that it was still committed to the buyout but didn’t raise its offer, suggesting it may be willing to walk away.
Boston Scientific is eager to jump into the $10 billion global market for pacemakers and defibrillators as J&J and others work to topple the Natick, Mass.-based company as the leading maker of drug-coated heart stents.
“For them to get the opportunity to participate in the largest medical devices market in the world, there’s no question it outweighs the risks,” Jefferies & Co. analyst Ryan Rauch said.
Any deal that results from Boston Scientific’s offer Monday is expected to siphon away earnings over the next two years – a blow to a company that has seen its stock drop 42 percent over the past 18 months amid its failure to come up with a blockbuster product to replace its Taxus stent.
