Cochlear CEO: Takeover bid possible

From: BusinessWeek - USA - Mar 29, 2007

MELBOURNE, Australia

The chief of Australian hearing implant company Cochlear Ltd. said Thursday he had "no idea" if U.S.-based Medtronic Inc. is interested in taking it over, but that such a bid was possible.

Broking house ABN Amro said in a research note Cochlear could be an "attractive takeover candidate" for Medtronic, which is currently seeking acquisitions.

"I guess as a public company it's always a possibility, but I don't think there's any magic in this" scenario, Cochlear CEO Chris Roberts told Dow Jones Newswires.

He said he had "no idea" if Medtronic could be interested and hasn't been approached. Roberts also questioned why ABN AMRO's target price on Cochlear was still below the company's share price if it considered Cochlear a potential target.

A spokeswoman in Australia for Medtronic, which is based in Fridley, Minnesota, said the company doesn't comment on mergers and acquisitions.

Cochlear's share price has more than tripled in the past three years. The company, which competes mainly with U.S.-based Advanced Bionics, a unit of Boston Scientific Corp., holds around 70 percent of the global market for hearing implants.

Cochlear shares traded at around 63 Australian dollars on Thursday, valuing the company at A$3.46 billion ($2.8 billion). ABN AMRO has a A$57.25 target price on the stock, raising it this week from A$54.50 to take into account the possibility it may be a target.

Medtronic, which has market capitalization of around $56.2 billion, makes a wide range of medical devices in the cardiac, neurological and orthopedics businesses, but doesn't have a presence in the hearing implant market.

ABN AMRO analyst David Stanton said the workings of the cochlear implant are similar to Medtronic's spinal stimulator and it could benefit from Cochlear's expertise in research and development and manufacturing.

© 2007 BusinessWeek