Guidant sues Johnson & Johnson to force takeover
Guidant Corporation announced on Monday 7 November that it was initiating
a lawsuit against Johnson & Johnson to try to make it complete the
acquisition of Guidant in accordance with the December 15, 2004 Merger
Agreement. It could also mean a payment of a $700m breakup fee by Johnson &
Johnson
Johnson & Johnson stated last week that due to the product recalls and
regulatory investigation that it "was not required under the terms of the
merger agreement to close the Guidant acquisition". (see story
Johnson & Johnson
$25.4bn takeover of Guidant in doubt as Guidant faces lawsuits). Johnson
& Johnson stated on Monday that it "will vigorously oppose the lawsuit and
take all necessary action to enforce its rights under the merger agreement".
The Motley Fool considers that Guidant is obliged take action for the
benefit of its shareholders and that if the deal does fall through Guidant
could still be in line for a takeover by the likes of Abbott Labs or Boston
Scientific.
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