• Smith & Nephew Surges as Stryker Said to Plan Offer …

    www.bloomberg.com/…/stryker-said-to-plan-takeover-bi…

    Bloomberg L.P.

    Dec 24, 2014 – Smith & Nephew Plc rose in London trading after people familiar … The bid is still being finalized and the timing could change, said the people.

    That’s the headline last month.  Since then SNN has pulled back to a level that represents some opportunity.  Yesterday at the JP Morgan Healthcare Conference, Styrker management said little to change the dialogue, making me think a deal is more likely than not and at a higher price than projected because its taking a long, long time.
    ” In terms of M&A, management indicated in its press release and in thismorning’s presentation that the company has a strong balance sheet and will

    look to deploy capital in 2015. In Tuesday evening’s press release, CEO Kevin

    Lobo stated that, “Looking ahead, we are well positioned to optimize

    shareholder returns and are committed to efficiently deploying our balance

    sheet.” This commentary points to management’s, as well as the Board’s,

    willingness to use the balance sheet to maximize shareholder value. And with a

    balance sheet that’s historically been under-levered, coupled with a very low

    cost of debt, management indicated that its priority remains M&A. However, if

    business development is slower than expected, management will put its balance

    sheet to work and in 2015 buy back stock at greater-than-expected or historical

    rate. Again, the priority is M&A, but absent M&A, look for SYK to pursue a

    larger buyback to offset at least a portion of the $0.20 Fx headwind facing the

    company at current rates.”