Rumors of Stryker Takeover of Smith & Nephew Persist

Bloomberg reports that according to “people familiar with the matter,” Kalamazoo, Mich.-based Stryker Corp. is planning a takeover bid for Smith & Nephew.

According to the report, Stryker plans to offer a significant premium to Smith & Nephew’s current share price, with one source saying it could be about 30 percent.

Rumors of such a takeover have been circulating since May this year, especially following Medtronic’s tax inversion bid and acquisition of Irish company Covidien plc. However, the Michigan medical device company is not considering a so-called tax inversion because of limited tax benefits and political risk, one of the Bloomberg’s sources said. According to Morgan Stanley analysts, a Stryker purchase of Smith & Nephew may be much more positive for earnings if it isn’t structured as an inversion.

London, United Kingdom-based Smith & Nephew’s shares listed in the United States rose 10 percent last week based on speculation of the bid.