Biomet Shares Rise on Buyout Rumors

Various reports of Smith & Nephew’s purchasing fellow orthopedic device manufacturer, Biomet, helped spur the Warsaw, IN-based manufacturer’s stock, according to the Associated Press.

Shares of Biomet rose Monday after reports of London, UK-based Smith & Nephew’s plans to bid more than $11 billion for the manufacturer of artificial joints.

Last month, Smith & Nephew had talked about buying Biomet. If the talk of a $11 billion purchase becomes reality it would translate to roughly $45 per share, a 12.8% premium to Biomet’s closing trade Friday and a 20.3% premium to the closing price the day before the companies first disclosed they discussed a tie-up.

Shares of Biomet rose $1.60, or 4%, to a 52-week high of $41.50 in afternoon trading on the Nasdaq. The shares had traded in a range of $30.22 and $40 in the past year.

Lehman Brothers analyst Bob Hopkins wrote in a research report he’d originally assumed a private equity investor would buy Biomet for $42 to $44 per share.

“With Smith & Nephew apparently a more serious bidder than we thought and the potential for others to be involved the price could climb another few dollars,” he said. Still, he said he’d be surprised to see a bid north of $44 to $46.