Smiths Rejects Apax’s $3.89 Billion Medical-Unit Offer

Smiths Group Plc, the world’s biggest maker of airport-security scanners, rejected a 2.45 billion-pound ($3.89 billion) offer for its Smiths Medical business.

The cash offer was made by London-based private-equity firm Apax Partners LLP, according to two people with knowledge of the matter, who declined to be named because the bidder’s identity is private. The offer was rejected as not in the interest of shareholders, Smiths said in a statement today.

“The board has carefully considered this approach with its advisers and has concluded that it would not be in the interests of shareholders to pursue discussions on the basis of an indication at this price,” London-based Smiths said in the statement.

The medical unit makes critical-care and surgical products for hospitals. The unit posted 857.6 million pounds in revenue in 2010, about 31 percent of the company’s sales, according to data compiled by Bloomberg. An Apax spokesman declined to comment, as did a Smiths Group spokesman.

Apax manages about $40 billion of assets. Its investments include stakes in TDC A/S, Denmark’s biggest telephone company, and Hit Entertainment Ltd., the children’s entertainment company that owns Thomas the Tank Engine and Bob the Builder.

Leveraged buyout firms such as Apax pool money from investors to take over companies, financing their purchases mostly with debt, with the intention of selling them later for a profit. These firms seek to expand or improve performance at companies they acquire before selling them within about five years.

To contact the reporters on this story: Howard Mustoe in London at hmustoe@bloomberg.net; Anne-Sylvaine Chassany in London at achassany@bloomberg.net

To contact the editors responsible for this story: Colin Keatinge at ckeatinge@bloomberg.net; Edward Evans at eevans3@bloomberg.net

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