Boston Scientific Corp. made an unexpected $25 billion takeover offer yesterday for troubled medical device maker Guidant Corp., more than $3 billion more than what Johnson & Johnson agreed to pay for Guidant last month.
The offer comes nearly a year after Johnson & Johnson said it would buy the Indianapolis company for $25.4 billion. Johnson & Johnson cut its offer after a series of Guidant product recalls and related regulatory investigations, and Guidant management accepted the lower price of $21.5 billion last month.
Boston Scientific, whose products include the top-selling cardiac stent Taxus, offered Guidant a combination of cash and stock worth about $72 per Guidant share -- a 16 percent premium over Friday's close.
"The primary driver of our proposal is to increase Boston Scientific's diversification and grow our cardiac-rhythm management business," Boston Scientific's chief operating officer, Paul A. LaViolette, said in an interview with the Associated Press.
Boston Scientific executives said the prospect of entering the lucrative $10 billion market for implantable pacemakers and defibrillators by purchasing Guidant outweighs the legal risks posed by Guidant's recent problems.
"We understand there have been some recent issues, but we believe they are manageable," LaViolette said.
Guidant said that it had received the proposal and that its board would consider it. "Guidant will have no further comment on this matter at this time," it said in a statement.
A Johnson & Johnson spokesman did not return calls seeking comment.
Guidant's once flagging stock rose $6.16, or nearly 10 percent, to close at $67.98.