Smith & Nephew (SNN) Higher As Takeover Speculation Grows

Smith & Nephew plc (NYSE: SNN) is 3% higher in early action on growing takeover speculation. According to reports, the private equity group that bought Biomet, Inc. (NASDAQ: BMET) could also target Smith & Nephew. The group was made up of Blackstone Group, Goldman Sachs Capital Partners, Kohlberg Kravis Roberts & Co. and TPG.

Smith & Nephew and Biomet were engaged in merger talks prior to the private equity group deal.

Smith & Nephew Plans $11B Bid for Biomet (BMET)

According to reports from Reuters, Smith & Nephew Plc (NYSE: SNN) plans to offer $11 billion for Biomet Inc. (NASDAQ: BMET), citing unnamed sources familiar with the matter.

Bids are due Tuesday and others will also likely submits offers, the sources said.

Earlier in the month, Smith & Nephew confirmed that it has held very preliminary talks with Biomet.

UBS Says Biomet (BMET) Will Likely Be Bought

Biomet (Nasdaq: BMET) : BMET is a designer, manufacturer and marketer of joint replacement products. BMET hired Morgan Stanley-MS on 4/6/06 to help the company explore strategic alternatives. SNN said on 11/2/06 it held "very preliminary" talks with BMET. UBSW said today 'we think BMET is likely to be bought, but by whom?" BMET over all option implied volatility of 28 is below its 6-month average of 30 according to Track Data, indicating decreasing price risks. Paul Foster