Sector movers: Bid target Smith & Nephew lifts healthcare as Medtronic enters the fray

5th Jun 2014 14:37

Ongoing M&A speculation boosted the share price of Smith & Nephew (S&N) on Thursday, giving the healthcare sector a lift, as another company was reported to be interested in the medical devices firm.According to Bloomberg which cited people familiar with the matter, US peer Medtronic is in the early stages of preparing to make a bid for S&N but no offer is imminent. It is thought that a potential deal with Medtronic would be structured as a tax inversion, by which it would move its legal residence to the UK where companies benefit from lower levies.The reports follow comments last week from Kevin Lobo, the Chief Executive of Stryker, who said that the US company had been considering making an offer for S&N. However, Stryker was not ready to do so when rumours began to surface and was forced to rule itself out in a statement to the UK Takeover Panel. It is not allowed to make a bid for the company for the next six months, unless invited to do so by S&N itself or if another bidder emerges.S&N's shares were up 2.7% at 1,093p by 14:39. The stock has now gained around 17% over the two weeks after Stryker's interest was first reported to the market, valuing the market capitalisation at just short of £10bn.Analysts at Credit Suisse said today that there is a "potential bidding war on the horizon".Stocks have been bolstered in recent months after a wave of M&A activity in the global healthcare and pharmaceutical industry, including Zimmer's $13.4bn takeover of Biomet, the failed £69bn purchase of AstraZeneca by Pfizer, and the proposed $53bn acquisition of Allergan by Valeant.Others in the UK healthcare sector was also rising strongly today, including Al Noor Hospitals, Advanced Medical Solutions and Consort Medical.As an aside, in remarks to Sharecast Bill Hubard, Chief Economist at Markets.com, explained that a "wall of money" may be about to hit London, boosting the FTSE 100 this year, as American firms look to get in ahead of the next General Elections. Top performing sectors so far todayHealth Care Equipment & Services 6,043.17 +2.70%Industrial Metals & Mining 1,197.77 +1.07%Life Insurance 7,310.66 +0.96%Fixed Line Telecommunications 4,615.55 +0.95%Forestry & Paper 11,880.81 +0.73%Bottom performing sectors so far todayIndustrial Transportation 2,980.97 -1.65%Personal Goods 23,880.63 -1.55%Tobacco 40,309.40 -0.61%Electronic & Electrical Equipment 4,172.81 -0.60%Software & Computer Services 1,201.22 -0.43%BC