Jana Is Said to Hold Zimmer Biomet Talks After Building Stake

Sometimes-activist hedge fund Jana Partners has taken a stake in Zimmer Biomet Holdings Inc. and held talks with the company about potential strategic changes at the $26 billion medical-equipment maker, according to people familiar with the matter.

Zimmer Biomet announced Tuesday that Chief Executive Officer David Dvorak had stepped down and would be replaced by Daniel Florin, the company’s chief financial officer, as the board searches for a permanent replacement. While CEO succession is among topics that have been discussed by Zimmer Biomet and Jana, the company is pursuing its own strategic plan at the moment, one of the people said.

Shares in Zimmer Biomet rose as much as 3.7 percent in New York and traded 3 percent up at $130.15 at 11:54 a.m. in New York.

The size of the stake is unclear, but Jana and Zimmer Biomet were granted early termination under the U.S. Federal Trade Commission’s Hart-Scott-Rodino Act Thursday, a public filing that’s required when an investor buys shares in a company above a certain threshold.

Talks between New York-based Jana and Zimmer Biomet are ongoing, the people said.

Representatives for Jana and Zimmer Biomet declined to comment.

Warsaw, Indiana-based Zimmer Biomet was formed when a group led by Blackstone Group LP sold Biomet Inc. to Zimmer Holdings Inc. in 2015 in a deal valued at $13.4 billion including debt. Shares in the company are up 24 percent this year, giving Zimmer Biomet a market valuation of about $26 billion.

While most of New York-based Jana’s investments aren’t activist -- where it amasses shares and seeks to convince executives and directors to make changes to boost shareholder returns -- it’s those campaigns that often attract the most attention.

— With assistance by Joshua Fineman

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