Smith & Nephew has been rejected after the pound may not be for public information, to become the second largest UK companies in recent months to make such offer investors 7.0 billion from the criticism.
Johnson & Johnson, the US healthcare group, approached Smith & Nephew late last year but its offer was knocked back by the hip-and-knee replacement manufacturer’s board as too low.
The offer, which people close to the FTSE 100 company believe to be priced at about 750p-800p a share, came at a similar time to when sustained takeover speculation pushed Smith & Nephew shares up by 14 per cent over December. They gained a further 12 per cent in early trading on Monday to stand at 727p.
It is not clear whether Johnson & Johnson would return with improved terms at a later date, these people said. Smith & Nephew has been a perennial target for takeover talk over the past decade owing to its position as one of the smaller players in the medical devices market, a maturing industry where global players are at an advantage.
The UK’s takeover watchdog can force a group to confirm a takeover approach if speculation has an unusual effect on its share price. The company could now be forced to make a statement to the market, although as of Monday morning it had not done so. Smith & Nephew on Sunday said it was against company policy to comment on “market speculation”.
“We are aware of our obligations, and the board is entirely focused on the creation of shareholder value,” it said. Johnson & Johnson declined to comment.
News of the approach comes after the banknote printer De La Rue was criticised by some of its shareholders for failing to disclose an approach from France’s Oberthur Technologies.
The distraction to day-to-day business caused by takeover approaches means companies can be reluctant to inform their investors when they reject an offer. One UK institutional investor said: “Management teams sometimes have a vested interest in keeping approaches secret. I think a company’s shareholders should be allowed to make their own decision.”
While Johnson & Johnson was one logical buyer of Smith & Nephew, industry bankers said the company would be likely to attract more interest.
One with Biomet, the replacement of the hip, knee, and it is taken private in 2006, Blackstone, Goldman Sachs, KKR and TPG's shoulders Indiana manufacturers, the combination is possible.

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