Shares in medical-device maker Boston Scientific shot up nearly 10 percent in midday trading Monday after a report that it has received a "takeover approach" by Michigan-based orthopedic device company Stryker Corp.
The Wall Street Journal, citing unnamed sources familiar with the matter, reported Monday that Stryker recently made its takeover bid to Massachusetts-based Boston Scientific Corp. It was not clear that it was receptive to the offer to create a medical-device company with a combined value of more than $110 billion, according to the Journal.
The news report emphasized that "it is far from guaranteed there will be a deal." However, if a deal is done, it would be one of the larger deals of the year.
A spokeswoman for Boston Scientific cited a practice of not commenting on "rumors or speculation."
The report comes at a time when corporate deal-makers are closely scrutinizing large deals, including AT&T's pending merger with Time Warner, an $85 billion deal that the Justice Department has sued to block. If the AT&T-Time Warner tie-up gets a favorable ruling from a federal court this week, it could invigorate interest in other deals around the country, observers say.
Boston Scientific is one of the largest medical device companies operating in Minnesota, with large plants in Arden Hills and Maple Grove and other locations in places like Plymouth. The company employs more than 5,000 people in the state who design and build devices including cutting-edge stents and pacemakers.
Though it has recently stressed to investors its ability to innovate new technologies, over the years Boston Scientific has grown through acquisitions.
Boston runs a sizable campus in Arden Hills, Minn., where heart-rhythm devices like pacemakers and defibrillators are designed and made. The campus was formerly operated by Guidant, which Boston Scientific acquired in a troubled $27 billion deal in 2006.
The Guidant acquisition transformed Boston Scientific into a much more diverse company that could sell stents and pacemakers, but at a very high price. At $27 billion, the deal price had been driven too high in a bidding war at a time when growth in heart-rhythm devices was slowing and a global recession was kicking in. Boston Scientific's stock didn't surpass its pre-Guidant price until 2016, but company executives say the post-Guidant "turnaround" is complete.
Boston Scientific also has a major campus at 1 Scimed Place in Maple Grove, so named for SciMed Life Systems, the Minnesota-based maker of small devices for interventional cardiology procedures like placing stents. Boston Scientitic acquired the company and its Maple Grove location in 1995 for about $1 billion at a time when angioplasty was a fast-growing med-tech therapy.
On Monday, Boston had a market capitalization of $48 billion, compared to Stryker's $65 billion.
Boston's stock was up 9.5 percent to $34.99 injust after noon Monday; Stryker was down nearly 3.5 percent to $172.76 per share.
Stryker, named for Michigan orthopedic surgeon and inventor Dr. Homer Stryker, has major product groups in orthopedic devices, medical and surgical supplies, neurotechnology and spine products.
This is a developing story.
