Stryker denies Smith & Nephew bid

US group Stryker has hired banks and is working on obtaining funding for a possible bid for UK-listed medical device maker Smith & Nephew, which specialises in wound management, endoscopy and orthopaedics, The Financial Times reported on Wednesday.

Smith & Nephew shares were up 17.5 per cent in an initial surge to an intraday high of 1,120p after the news first broke. The stock however quickly pared gains to just 2.8 per cent after it was reported that Stryker was not looking to make an offer.

On Wednesday, at the request of the UK Takeover Panel, Stryker confirmed that it did not intend to make an offer for Smith and Nephew.

However, the reports followed a wave of M&A deals and rumours across the global healthcare and pharmaceutical sectors that had given the  sentiment a lift in recent months.

Among these were Biomet's $13.35-billion purchase of Zimmer, a multi-billion pound asset swap between GlaxoSmithKline and Novartis, and, most recently, Pfizer's failed near-£70 billion takeover of AstraZeneca.

Healthcare equipment and service peers including Tristel, CareTech and NMC Health, all were seen making gains Wednesday.

Trading volume in Smith & Nephew shares was also up, as it came up four times the stock's three-month daily average.

The Financial Times had reported on its website earlier that the US company was preparing a bid for Smith & Nephew.

The report further added, any offer would likely be some way above the London-based group's stock market value.

Smith & Nephew had been frequently reported by analysts as a takeover target. In 2010 Johnson & Johnson approached the company on a possible offer, according to people familiar with the matter, Reuters reported.