Given Imaging Ltd. jumped the most on record after Covidien Plc offered to buy the Israeli maker of swallowable cameras at a 27 percent premium to the closing price of its U.S.-traded stock.
Shares of Yokneam, Israel-based Given soared 21 percent, the biggest advance since listing in Tel Aviv, to 99.3 shekels, or the equivalent of $28.35. The U.S.-traded stock closed at $23.65 on Dec. 6.
Covidien, the Dublin, Ireland-based medical instrument maker, plans to acquire the outstanding stock of Given for $30 a share in cash, or a total of about $860 million. Shares of Given have more than doubled from their low in June amid speculation of a takeover deal. The company’s flagship product is the Pillcam, a swallowed optical endoscopy technology for the small bowel, esophagus and colon.
“This transaction is in the best interests of Given Imaging, its shareholders and employees,” said Homi Shamir, president and chief executive officer of the company in a BusinessWire statement today.
The acquisition would be Covidien’s third in Israel in the past two years, according to data compiled by Bloomberg. It bought Polytouch Medical Ltd. in April 2012 and Oridion Systems Ltd. in July 2012. With the most startup firms per capita of any country in the world, cash is pouring into Israel as investors from Google Inc. to Cisco Systems Inc. buy local companies, helping the shekel beat every major currency versus the dollar.
Covidien said Given will add as much as $50 million per quarter in incremental revenue to the medical devices segment.