(Bloomberg) — Baxter International Inc. is in advanced talks to acquire Hill-Rom Holdings Inc. for about $10 billion, Dow Jones reported, citing people familiar with the matter.
The deal values the medical device maker at about $150 a share, Dow Jones reported. That’s a 13% premium to the stock’s closing price of $132.90 on Friday. The transaction is expected to close in the middle of the week, and talks could still fail, it said.
The new offer comes a month after Hill-Rom rejected a $9.6 billion takeover bid from Baxter, Bloomberg News previously reported. Hill-Rom thought Baxter’s proposal of about $144 a share was too low, according to those in the know. Baxter was expected to return with a higher bid, people said.
Chicago-based Hill-Rom makes a range of hospital equipment, including stretchers, patient monitors, operating tables and electrocardiographs, according to its website.
Medical device and supply companies are consolidating as they want to sell a wider range of products to their hospital customers. Major deals, such as the $43 billion acquisition of Covidien Plc by Medtronic Plc and the purchase of St. Jude Medical Inc. for $25 billion by Abbott Laboratories, other companies have pursued scaling through acquisitions.
Hill-Rom shares are up 36% this year, nearly twice the gain of an S&P 500 index that tracks healthcare companies, while Deerfield, Illinois-based Baxter is down 7.8%. Both stocks are trading at approximately 21 times estimated earnings.
Baxter said in an emailed response it would not comment on rumors or speculation. An official at Hill-Rom did not immediately respond outside normal office hours.
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