Smith & Nephew Plc, the U.K. maker of knee and hip replacements that has been a takeover candidate for a decade, isn’t facing shareholder pressure to accept any offers, Chief Executive Officer Olivier Bohuon said.
Earlier this year, Stryker Corp. CEO Kevin Lobo said the Kalamazoo, Michigan-based company was in the early stages of evaluating London-based Smith & Nephew for an acquisition. Medtronic Inc., based in Minneapolis, was also said to consider bidding for the company before deciding to buy Covidien Plc.
U.S. health-care companies are racing to find tax relief abroad in so-called inversion acquisitions before the U.S. government curbs the option. The largest medical-device companies are also banding together to compete as hospitals cut costs to accommodate price pressure resulting from the U.S. Affordable Care Act.
“We have been a significant target for the last 10 years,” Bohuon told reporters on a conference call. “Are we going to remain independent? It’s not up to me to tell you that. I don’t have any specific pressure from shareholders at this stage.”
Second-quarter sales rose 3 percent on an underlying basis to $1.15 billion and profit rose 6 percent to $255 million, helped by the acquisition of ArthroCare on May 29, Smith & Nephew said today.
The stock rose 3.8 percent today, the steepest gain in two months, to close at 1,065 pence in London. The shares have advanced 24 percent this year, giving the company a market value of 9.5 billion pounds ($16 billion).
The company plans to introduce a new low-cost hip and knee implant called Syncera, it also said today. While the product will have a similar profit margin to Smith & Nephew’s traditional implants, a discount of about 40 percent to 50 percent could save a hospital more than $4 million over three years, Bohuon said. The line will be introduced this month, he said.