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Drugmaker Abbott says not pursuing an offer for St Jude Medical

August 31, 2015
Life sciences

(Reuters) – Drugmaker Abbott Laboratories, knocking down a report in the Financial Times, denied on Thursday that it was preparing a bid for medical device maker St Jude Medical Inc.

The FT, citing people familiar with the matter, reported that Abbott has been working with advisers for several weeks to line up financing for a $25 billion cash and stock bid for St. Paul, Minnesota-based St Jude. St Jude’s shares, which jumped 15 percent premarket trading following the report, were up 3.4 percent at $71.72 in early trading.

The company had a market value of about $19.5 billion as of Wednesday’s close.

“I can tell you that we are not pursuing an offer for St Jude,” Abbott spokesman Scott Stoffel told Reuters.

St Jude did not immediately respond to a request for comment.

A source familiar with Abbott’s thinking said he did not believe a deal was seriously contemplated, while Evercore ISI analyst Vijay Kumar said Abbott was more likely to do medium-sized deals than a big transaction.

Abbott Chief Executive Miles White said last month that he was interested in acquisitions, including in the device sector, but would be cautious because a flurry of deals in the healthcare industry had pushed up valuations.

Abbott had cash on hand of almost $4 billion as of June 30.

RBC Capital Markets analyst Glenn Novarro said last month that a deal in the region of $5 billion for a device maker was more likely than something larger.

Kumar and Wells Fargo Securities’ Larry Biegelsen said on Thursday they expected Abbott to strike a deal in either the medical device or generic drug industries.

Abbott shares, which had fallen about 2 percent this year up to Wednesday’s close, were up 1.8 percent at $44.75.

By Vidya L Nathan

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