Another such victory and we are undone

OK, now this is really getting ridiculous. Johnson & Johnson, in response to Boston Scientific’s higher bid, upped their bid for Guidant to $71 per share. The Guidant board accepted it, sacrificing the $2 premium from BSX for a ‘sure thing’ (the FTC has already approved the JNJ merger but has not had a chance to rule on the BSX merger) and the stronger balance sheet of JNJ.

So I open up the financial news today and Boston Scientific upped their bid for Guidant to $80 a share! I guess they are serious about this now. The deadline for Guidant’s board to accept it is at 5pm today. The board let a similar deadline pass on Friday, using the leverage of the BSX bid in order to get JNJ to up their offer.

To think that just 2 months ago JNJ was able to bargain their original takeover price down from $76 a share to $63. But that was before Boston Scientific entered the picture. So does JNJ increase their bid to match their original $76 offer? If they fail, BSX has cost JNJ several billion dollars if Guidant chooses their original suitor. And if they win, I wonder if it will be a pyrrhic victory for Boston Scientific at this inflated price.