Boston Scientific yesterday raised its offer to buy Guidant to about $27 billion (€22.32 billion), escalating a bidding war with Johnson & Johnson for the maker of cardiac devices and heaping pressure on Guidant to take the deal.
The latest bid, which is about 12 per cent higher than J&J's current agreement to acquire Guidant for $24.2 billion, includes a tight deadline.
Boston Scientific said the $80-per- share offer will expire at 5 pm.
New York time yesterday unless Guidant declares its proposal superior to the agreement with J&J.
Guidant, which last Friday walked away from a higher bid by Boston Scientific, said it would evaluate all aspects of the offer. Investors and analysts believe Boston Scientific's current bid will be hard for Guidant to refuse.
"Eighty dollars a share is such a big difference that Guidant would be reckless and irresponsible if they didn't declare it superior," said an arbitrageur who declined to be named.
Both Boston Scientific and Johnson & Johnson are vying for Guidant's share of the $10 billion market for implantable devices that help regulate heartbeats. Boston Scientific wants the business to offset slowing sales of its drug-coated stent treatments for clogged arteries.
J&J is looking to offset declining sales growth in prescription drugs.
The counter-bid follows a volley of back-and-forth bids for Guidant, which has suffered from product recalls and litigation over the safety of its implantable heart devices.
"The offer is very rich, so it's likely J&J won't be able to come within striking distance of it," said John Chen, merger and arbitrage analyst with independent research firm Cathay Financial.
He said J&J would need to raise its bid to $77 or $78 a share to remain competitive with the Boston Scientific offer, but he does not see it happening.
"I think they are a disciplined enough company that they won't do that and I think they will bow out," he said.
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