Medical products firm shares up 12%

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Shares in healthcare firm Smith and Nephew have soared to a record high after reports it rejected a bid approach from a US rival

Shares in healthcare firm Smith & Nephew have soared to an all-time high following reports that it rejected a bid approach from US rival Johnson & Johnson.

The leading maker of hip and knee replacements is said to have turned down an indicative offer worth around £7 billion before Christmas.

Hull-based Smith’s share price rose 12% to 726.5p by mid-afternoon on Monday, adding around £650 million to its market value, and followed strong gains in December believed to have been driven by takeover speculation.

The reports raise the possibility of another UK company being sold to an overseas buyer following Cadbury’s takeover by American giant Kraft last year.

The approach, thought to be worth around 750p a share, was rejected outright by the board as an undervaluation of the company, according to reports.

It is not known whether Johnson will return with a higher offer.

Other large American healthcare groups are also thought to be interested in Smith, including Zimmer and Stryker.

Both companies refused to comment on the rumours but the Takeover Panel can force companies to confirm takeover approaches if they have an unusual effect on the share price.

Johnson & Johnson has a medical devices division and owns a number of well-known UK household brands, including Listerine, Sudafed and Benecol.

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