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Without Smith & Nephew (LSE:SN.), Christmas Eve at the London Exchange would have been ho-hum, but the company turned the half-day session into a ho-ho-ho. It’s always interesting news when a stock increases 7.7% in a single day, but when Smith & Nephew’s share price increased that amount it was more than interesting. It was exciting. That 7.7% increase represented 84.0 pence per share, bringing the company’s share price to 1,173.0, significant enough to offset the drag the other shares had placed on the market. So, when the doors closed for the day, everyone went home with the FTSE 100 up 0.2%.
Bloomberg released a story this morning that U.S.-based Stryker (NYSE:SYK) may be about to tender an offer for the British medical devices company. Smith & Nephew is a global medical technology business and is considered to be a leader in orthopedic reconstruction, advanced wound management, sports medicine and trauma extremities and fixation. Stryker is “a global leader in the medical technology industry. Company growth is based on an unparalleled variety of high-quality, innovative products and services that create cost-effective solutions and improve people’s lives.”
What Makes this News Interesting
- Stryker has been interested in acquiring Smith & Nephew for a while. In late May 2014, Stryker quelled takeover rumors, saying that it was not prepared for a takeover. Note that they did not say that they were not interested.
- Regulations prohibited Stryker from making any offer for six months following that statement.
- Stryker has no interest in an M&A for tax inversion reasons.
- The two company’s combined market share in the U.S.alone would swell to more than 20%.
The initial story this morning indicated that an offer may be forthcoming within the next few weeks, but the inside sources who leaked the information also cautioned against unbridled enthusiasm, reminding us that there may be details yet to be worked through, any of which could also be deal-breakers. At this point, even a 50-50 chance is enough to start visions of sugar plums dancing in the heads of investors as they lay down tonight for a long winter’s nap.
The present from Stryker and Smith & Nephew may not be under the tree, but it also may be close enough to Christmas that Santa may have to make a second trip.
Finally, from me to all of our ADVFN readers, “Merry Christmas to all, and to all, a good night.”
