Indianapolis – Guidant Corp. jilted longtime suitor Johnson & Johnson on Wednesday in favor of a $27.2 billion offer from rival Boston Scientific Corp., ending one of the most highly charged bidding wars in years.
The move capped nearly two months of negotiations and sweetened deals from J&J and Boston Scientific, which saw the Indianapolis-based company as an opening to the $10.3 billion cardiac-device market.
But Guidant also is grappling with months of product recalls and is less than a month away from the first of what could be several product-liability trials. Securities analysts say it ultimately could be liable for as much as $2 billion in damages.
Shares of Boston Scientific and Guidant fell about 2 percent Wednesday on the New York Stock Exchange, an indication that some investors believed Boston Scientific’s $80-a-share offer was too high.
“Clearly, they paid a full price for it, and there are uncertainties associated with Guidant,” said David Katz, chief investment officer at Matrix Asset Advisors in New York, which owns about 1.5 million shares of Natick, Mass.-based Boston Scientific. “But (the deal) does change the whole business and the franchise of Boston for the better, assuming they pull it off.”
Since June, Guidant has recalled or issued safety advisories on about 88,000 defibrillators and more than 200,000 pacemakers. At least seven deaths have been linked to the faulty devices.
