J&J sweetens its offer for Guidant in face of Boston offer

In the face of a counter-offer from Boston Scientific of $25.0 billion, Johnson & Johnson says that it has reached a new agreement whereby it will acquire Guidant for the increased offer price of $23.2 billion (versus the previous $21.5 billion) in fully-diluted equity value (Marketletters passim). The boards of directors of both companies have unanimously approved the revised offer and the Guidant board of directors recommends that its shareholders vote in favor of the agreement at the scheduled January 31 shareholder meeting.

Under the new agreement, J&J will pay $37.25 in cash and 0.493 shares of its common stock for each outstanding share of Guidant. Valued as of the market close on January 11, the transaction has a per share value of $68.06 to Guidant shareholders.

Boston was quick to reply to J&J's announcement, saying that it intends to "vigorously pursue this transaction to completion."