INDIANAPOLIS — With one day left for Johnson & Johnson to seal the deal on its $25.4-billion acquisition of Guidant Corp., New York Atty. Gen. Eliot Spitzer said Thursday that he was suing Guidant, alleging it concealed information about a heart defibrillator's design flaw.
Shares of the Indianapolis-based maker of medical devices fell 4.7%, or $2.83, to $57.57. J&J lost 10 cents to $61.20.
Even if the deal the companies agreed to 10 months ago goes through, J&J probably would pay significantly less than the original price, some experts said. And if J&J scraps it, the companies may go to court.
Although the agreement stipulates a $700-million breakup fee, J&J has already suggested that product recalls in recent months by Guidant and federal investigations of the company may have had the materially negative effect that would allow it to simply walk away.
The companies have until today to close the purchase.
Since June, Guidant has recalled or issued warnings on about 88,000 heart defibrillators -- including its top seller, the Contak Renewal 3 -- and almost 200,000 pacemakers because of reported malfunctions. The company faces multiple lawsuits from patients and shareholders, as well as a reported criminal investigation by the Food and Drug Administration.