”The Wall Street Journal” financial newspaper, citing knowledgeable sources, today reported that Boston Scientific is nearing agreement to acquire 80% of Medinot, in which it already holds 20%.
The report said that negotiations for the deal, which began last summer, have picked up steam in recent weeks, with the offer of a price of $1.5-2 billion in cash and shares (at a value of $1.875-2.5 billion for Medinot). At the same time, the gap between Medinol’s asking price and what Boston Scientific is willing to pay still remains “significant”, according to the sources. A Boston Scientific source declined to respond to the newspaper’s question.
Medinot manufactures cardiovascular stents, which Boston Scientific markets. The stent, a sort of elastic cylinder supporting an artery, keeping it open after widening by balloon catheterization, has been one of the fastest-growing medical markets in recent years.
The alliance between Medinol and Boston Scientific, once considered a great business success, later deteriorated into behind-the-scenes mutual accusations and quarreling over safety problems, following damages caused by use of several stents, which had to be returned for repairs, and the loss of the two companies’ stent market share to competing products.
Medinol cofounder and owner Jacob Richter in an interview last month declined to state what Boston Scientific was offering, but defined it as so low that he did not take it seriously. In recent weeks, however, Richter has lowered his demands, according to knowledgeable sources.
At the close of trade on the New York Stock Exchange, the Boston Scientific share posted a $1 fall (6.9%) to $14.50, reflecting a $6 billion market value. The company was traded at over $40 billion in 1999.
Published by Israel's Business Arena on January 22, 2001