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J&J's Offer Is Accepted by Guidant

January 14, 2006|From Associated Press

Medical device maker Guidant Corp. accepted an increased $24.2-billion buyout offer from Johnson & Johnson on Friday night, turning aside a larger $24.9-billion bid from Boston Scientific Corp. in favor of a deal that Guidant said could be concluded more quickly.

The announcement of J&J's latest bid and Guidant's acceptance came about 24 hours after Natick, Mass.-based Boston Scientific increased its offer, and about three hours after passage of a deadline Boston Scientific had set for Guidant to respond.

The boards of both J&J and Guidant have unanimously approved the new J&J offer, which is to be voted on by Guidant shareholders Jan. 31, the companies said. Guidant's board previously had accepted J&J's earlier $23.2-billion offer presented Wednesday, but Boston Scientific's move to raise its proposal Thursday prompted J&J to increase its bid a second time.

The move came after more than a year of deal-making between J&J and Indianapolis-based Guidant. New Brunswick, N.J.-based J&J reduced its original $25.4-billion offer to $21.5 billion in November in response to recalls and regulatory investigations involving Guidant products. Unlike Boston Scientific's proposal, J&J's offer already has cleared an antitrust review, which would speed the process toward closing a deal.

"This agreement with Johnson & Johnson provides significant financial value and certainty for shareholders," James Cornelius, Guidant's chairman, said in a statement.

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