Companies
Smith & Nephew retreats from Biomet merger deal
British healthcare group, Smith &
Nephew, pulled out of merger talks last month with rival,
Biomet. The US company then agreed to be
acquired by a private equity consortium which included the
Blackstone Group,
Goldman Sachs Capital Partners and Kohlberg
Kravis Roberts.
Biomet had previously announced it would have to delay announcing its second
quarter earnings due to the findings of its review of stock option practices.
A
preliminary report presented to its board revealed that a substantial number of
stock option grants made from 1996 to 2006 were issued as of dates other than
the dates on which the grants were actually made to take advantage of a lower
stock price on the date of issue. The review also found poor documenting of the
dates of grants suggesting poor internal controls.
Shareholders will now have to approve the merger deal between Biomet and
the private equity consortium.
Lombard in the Financial Times (19 December)
said it would have been good for a UK company to show it can play in the
international merger markets but instead Smith & Nephew had been sent home
empty-handed. Like Nils Pratley in The
Guardian (19 December) Lombard indicated that this failed deal meant Smith &
Nephew was now a target for a private equity bid. Pratley said that its chief
executive, Chris O'Donnell, had probably made the right decision to pull out of
the Biomet deal but it would not help the company's fight for independence.
Links
Smith & Nephew
Biomet
Blackstone Group
Goldman Sachs Capital Partners
Kohlberg Kravis Roberts
Financial Times
The Guardian
January, 2007 |
