The door is still open for BSCI on Guidant

Following the surprising (but not shocking) offer yesterday by Boston Scientific to buy Guidant for $25B, upping the deal by $3.4B over J&J’s renegotiated deal, Guidant is agreeing to cooperate with Boston Scientific’s review of Guidant as a precursor to finalizing the $25B offer. This could be viewed as Guidant simply going through the motions, but since J&J has indicated that it still sees $21.5B as “full and fair value” for the deal (see NYT today) and J&J Chairman William J. Weldon’s statement as such did not mention Guidant shareholders, it’s a fair bet that in short order there will be a sweetener added to the deal, lest Guidant shareholders demand more.Even though the burden on Boston Scientific would be extreme, quadrupling its debt burden, the opportunity to jump into the $10 billion pacing/defib market would give it a boost it needs. Although Taxus has doubled the company’s earnings in each the last four quarters, the company’s stock price has slipped by 42% as investors have been itching for the company to come up with the next big thing after Taxus.Even without Guidant in the picture, I have every reason to believe Boston Scientific and J&J are both developing and looking for just such a thing.

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