A false market could emerge in S&N’s shares if no statement is made
Following a day of speculation, we still don’t know whether Johnson & Johnson bid £7 bn ($11 bn) for Smith & Nephew, as was claimed by Sky News at the weekend.
S&N’s shares closed 9.5 percent up today off the back of the story, but there has been no statement from the company to clarify the situation.
If S&N did receive a bid, it should really say so. The UK’s Takeover Panel requires companies to make a statement if there is ‘untoward’ movement in their share price following a bid. (This rule is there to ensure all shareholders get to hear about a leaked bid.)
And if S&N didn’t receive a bid, it should say so, too. Otherwise we are surely seeing a false market develop in its shares.
It’s time for the UK’s Takeover Panel to step in and make S&N clear this up.
Update – It's being put about that S&N got off making a statement about J&J's approach because the alleged bid was old and the target reportedly did not expect the suitor to come back. In other words, the approach was deemed no longer current and, therefore, under UK takeover rules, S&N was exempt from making a statement about it.
If the rules have been applied in this way, it doesn't make the UK's takeover regime look good. The pressing issue is the confusion in the marketplace now – so a statement is needed now to clear it up.
