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Johnson & Johnson Message Board

  • bamachica116 bamachica116 Jun 18, 2012 1:42 PM Flag

    JNJ and EW??

    Have heard this rumor for years (JNJ acquiring EW). EW is a high right now with the new TAVI and the positive FDA news last week. And although the "insiders" at EW are always selling options (monthly for most) it seems there has been more of that lately.

    Would be interested if someone with much more market knowledge than myself would comment or direct me as to what kind of data to review as far as anticipating a buyout

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    • It is more likely JNJ will buy BSX. Here is why:

      -JNJ exited the stent market because JNJ had an inferior stent and couldn't compete with BSX.

      -JNJ exited the stent market in order to clear anti-trust hurdles if they were to now buy BSX.

      -JNJ sent their top medical device executive (Mahoney) to sniff around at BSX and become BSX's CEO in November.

      -BSX has reduced it's longterm debt from 6 billion in 2009 to 4 billion in 2012 to become more attractive to a potential suitor like JNJ.

      -BSX has initiated a stock buyback plan in order to reduce the float and make an acquisition more attractive to a potential suitor like JNJ.

      Even if JNJ was to split up it's medical device unit into a standalone separate company, they would still buy BSX. Abbott is also separating out it's medical device division into a separate company. BSX could be bought by both JNJ and Abbott, with JNJ getting the stents, and Abbott getting the defib business. Just remember that JNJ wanted Guidant. Now they can get it at a much much lower price.

      Short interest in BSX has gone from 48,789,645 in June of last year, to 23,082,590 on 5/31/12! Shorts are covering because they see Nicholas and Abele transferring shares into a protected trust.

      That is my read on BSX. Target buyout price $10-$12.

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