Smith & Nephew gains amid Medtronic bid speculation

5th Jun 2014 09:18

M&A speculation surrounding Smith & Nephew (S&N) continued to do the rounds on Thursday amid reports that US peer Medtronic is looking to take over the company.According to Bloomberg which cited people familiar with the matter, Medtronic is still in in the early stages of preparing to make a bid and no offer is imminent. S&N is said to be "aware of Medtronic's interest as are investment banks", Bloomberg said.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.Analysts at Credit Suisse said on Thursday that there is a "potential bidding war on the horizon".S&N's stock was up 4.8% at 1,115p by 09:53 and has now climbed by 22% over the past month.BC