Medtronic Rises on Report Deal Near to Sell Unit to CardinalBy
Cardinal has been the frontrunner for the unit since bids were submitted last month, Bloomberg reported at the time, citing people familiar with the matter, who said the unit could go for as much as $5 billion. Reuters said Wednesday that the companies were in exclusive talks and could announce a deal later this month, according to people familiar with the matter.
Medtronic shares were up 1.6 percent to $81.50 at 5:54 p.m. in New York, after the markets closed. Cardinal shares were unchanged. Representatives for both companies declined to comment specifically on the report.
“From an overall capital deployment strategy, we would always look at opportunities that fit strategically and create long-term value for our shareholders,” said Ellen Barry, a Cardinal spokeswoman. Jeff Trauring, a Medtronic spokesman, said the company will “take a disciplined approach in reviewing our portfolio and only go forward if it makes sense given our strategic priorities.”
Medtronic, based in Dublin, is the largest medical-devices company in the world with a market valuation of about $110 billion. It started working with advisers to prepare a sale of the supplies business in January, people familiar with the matter said then.
Offloading the medical-supplies business, which sells everything from needles and catheters to monitoring equipment and medical instruments, would mark the disposal of mainly legacy assets from Medtronic’s $42.9 billion acquisition of Covidien Plc, announced in 2014. The purchase of Covidien allowed Medtronic to move its legal headquarters to Ireland, slashing the company’s global tax rate.