Guidant is talking with Boston Scientific about its $25 billion bid to buy the company, but Guidant also has not yet abandoned an earlier $21.5 billion acquisition deal with Johnson & Johnson (J&J), according to a top Guidant executive.
In a recent letter to employees, James Cornelius, Guidant's interim CEO and chairman of the board, said the company is providing information and having discussions with Boston Scientific about its offer. "However, today we remain party to an agreement with Johnson & Johnson. The board has made no recommendation concerning the Boston Scientific proposal and will continue to evaluate it as discussions continue," he said in the letter.
Cornelius also shed some light on how the high-profile acquisition maneuvers were perceived at Guidant. "After entering into revised terms for an acquisition by Johnson & Johnson, Boston Scientific surprised all of us with an offer at a stated value significantly in excess of the revised Johnson & Johnson deal," he said.
Various governmental regulatory approvals and shareholder votes are required for a successful 2006 closing of a merger with Guidant, he said. "I wish I could provide a more precise picture of what the next several months will look like, but this is uncharted territory for all of us."
Boston Scientific's Dec. 5 acquisition bid followed J&J's Nov. 15 revised offer of $21.5 billion to buy Guidant, down from a $25.4 billion deal the firms agreed to in a December 2004 merger deal. J&J had threatened to abandon the deal entirely in the wake of mounting legal and regulatory problems with Guidant's implantable cardioverter defibrillators (ICDs) and pacemakers. Guidant has recalled or issued warnings on roughly 88,000 ICDs and 200,000 pacemakers since last summer. J&J has since reiterated its intention to purchase the company, and said its bid represents the full and fair value of Guidant.
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