June 25 (Bloomberg) -- Boston Scientific Corp., the maker of Taxus heart stents, said Jim Tobin will retire as chief executive officer after a 10-year reign that included a bidding war with Johnson & Johnson for Guidant Corp.

Tobin, 64, will be replaced July 13 by Ray Elliott, the 59- year-old former CEO of orthopedics maker Zimmer Holdings Inc., Boston Scientific said today in a statement. Elliott, who left Warsaw, Indiana-based Zimmer in 2007, will rejoin the board of Boston Scientific, where he served from 2007 until earlier this year, the Natick, Massachusetts-based company said.

Tobin helped orchestrate Boston Scientific’s $27.5 billion purchase of medical device maker Guidant in 2006, which Fortune magazine called the “second-worst deal ever” after Time Warner Inc.’s 2001 acquisition of AOL. Elliott takes over a company recovering from debt and U.S. penalties for manufacturing violations that delayed the introduction of new products. Under Elliot, Zimmer shares more doubled in six years of trading.

The “sudden and surprising” leadership change is likely “to be positive for the stock, given Elliott’s track record at Zimmer of creating shareholder value,” Michael Weinstein, an analyst at JPMorgan Chase & Co. in New York, said today in a note to clients.

Boston Scientific rose 49 cents, or 5.2 percent, to $10 at 4 p.m. in New York Stock Exchange composite trading, its biggest percentage gain since May 8. The shares have fallen 21 percent in the past 12 months.

CEO Transition

The management change has been in the works since November and was designed to limit Tobin’s time as a “lame duck,” he told investors today on a conference call.

“I’ve been here now 10 years,” Tobin said. “That’s enough. I believe and have always believed that 10 years is the natural limit for how long a CEO can be effective.”

Elliott will receive a signing bonus of $1.5 million and an annual base salary of $1.2 million, according to a regulatory filing by Boston Scientific today. Tobin will continue to be paid at his current annual base salary of $994,000 until Nov. 30 and will be eligible for a prorated bonus of 120 percent of his salary, the company said.

To contact the reporter on this story: Catherine Larkin in Washington at clarkin4@bloomberg.net.

Last Updated: June 25, 2009 16:12 EDT