Rumors that Stryker (NYSE: SYK) would have tabled an approximately $18 billion offer for Smith & Nephew (NYSE: SNN) were just renewed last week by a StreetInsider report that according to the source, Goldman Sachs would be acting as advisor, and deal talks could move quickly.
This isn’t the first time rumors about the bid have surfaced, but the merger never came about for reasons that are not clear.Similar rumors were reported by Bloomberg and the Financial Times following news of the 2014 Zimmer Biomet transaction, but the companies’ flirtations did not lead to a union, perhaps due to the rise of S&N’s stock price in anticipation of a deal.
Discussing M&A on the company’s third-quarter conference call, Stryker CEO Kevin Lobo said M&A is difficult to predict in terms of timing, though he said M&A continues to be the company’s first priority in terms of using cash.
Lobo went on to say, “…valuations is one factor; it’s not always the only factor. We also have issues sometimes around quality, of remediation that’s required. Sometimes it’s cultural fit, so there’s always a range of issues that we go through when we’re looking at a target, and as we get under the covers and do due diligence, then we sort of figure out whether we really want to move forward or not.”
Source:StreetInsider.com, fiercemedicaldevices.com.