Second US firm eyes bid for Smith & Nephew

Smith & Nephew could find itself at the centre of a transatlantic tug-of-war after a second US medical giant said it was looking at bidding for the company.

Medtronic, one of the world’s largest medical device makers, is considering an approach for the FTSE 100-listed hip replacement maker that would see the US firm move its tax base to Britain, Bloomberg reported.

Reports of a bid could see rival Stryker revisit its own offer for Smith & Nephew.

Kevin Lobo, chief executive of Stryker, revealed last week that his company had been tentatively exploring a move.

“We were in preliminary evaluations about considering a transaction,” he said. “It was [at an] early [stage], but based on the price spike of Smith & Nephew . . . we had to make this public statement.”

Smith & Nephew’s shares have jumped 11.7pc to £10.64 since Stryker’s announcement.

That statement also prevents Stryker from making an approach or acquiring shares in Smith & Nephew for six months unless the UK company invites it back or there is a rival bidder.

Medtronic and Stryker both see the deal as an opportunity to cut potentially huge tax bills in their home country. Any profits made in the UK would be subject to a 21pc corporate income tax rate, much lower than America’s 35pc.

Smith & Nephew and Stryker declined to comment. Medtronic did not return calls for comment.