Under siege hip-maker Smith & Nephew loses its boss

By Simon Duke for MailOnline
Updated: 17:29 EDT, 10 February 2011

Smith & Nephew sprung a surprise on its investors with the departure of its chief executive after four years at the helm.

David Illingworth is jumping ship as the medical equipment and artificial hip-maker remains under siege by larger rivals looking to swallow up the Footsie stalwart.

Standing down had been a 'very personal and difficult decision', said the 57-year-old, who plans to return to the US after leaving S&N in August.

Suitors: It is understood that Johnson & Johnson and rival Biomet have recently made informal approaches to S&N

He told the Mail: 'Investors have been very gracious. It's been quite overwhelming.' His replacement is Olivier Bohuon, 52, who has had spells at GlaxoSmithKline and US giant Abbott Laboratories.

Given the welter of predators circling the British firm, investors will hope that Bohuon lasts longer at S&N than he did at his last job.

He was hired to run French drugs firm Pierre Fabre in September, but quit less than five months later after reports of a 'profound' falling-out with the group's founder.

But according to Illingworth, Bohuon had been in talks with S&N for 'quite a while', suggesting the Frenchman was prised away. The first item on Bohuon's agenda could be to fend away the raft of unwanted suitors set to be eyeing up S&N. It is understood that US healthcare giant Johnson & Johnson and rival Biomet have recently made informal approaches.

Illingworth remained tight-lipped on the takeover speculation. Last month S&N insisted it was 'not engaged in any discussions which could lead to a merger or a takeover'.

Still, S&N is regarded as vulnerable. Analysts believe that a takeover of the British firm could unleash a long-awaited wave of consolidation across the industry.

Illingworth's final set of annual results marked the end of a three-year programme to improve earnings. Trading profits rose 9 per cent to £173million during the final three months of 2010 on revenues of £683million.

Illingworth struck a confident note on S&N's prospects this year despite the 'well understood challenges' facing the industry.

Governments are looking to share the pain of austerity among their main private sector suppliers, including healthcare firms such as S&N (up 15p to 727p).

Drugs group Shire (up 15p to 1671p) expects revenues to jump 16 per cent this year as its rare disease wing continues to benefit from the disarray engulfing a key US rival. Shire reported a 4 per cent rise in turnover to £580million between October and December.