Shares of Osteotech Inc. (OSTE) soared more than 64% in Tuesday trading, after Medtronic Inc. (MDT), the world’s largest maker of medical devices, said it agreed to pay $123 million, or $6.50 per share, for Eatontown, N.J.-based Osteotech, a 66 percent premium over the co.’s Monday closing price of $3.94.
Medtronic officials said in a news release that the acquisition of Osteotech will compliment Medtronic Biologics’ bone-healing portfolio, which includes products for the treatments of spine, orthopedic trauma, and dental conditions.
Osteotech, whose shares rallied the most intraday since the biotechnology firm went public in June 1991, announced that its current board had unanimously approved the deal.
“With a unanimous vote, the board of directors of Osteotech approved this transaction because the board believes it offers significant value to our stockholders,” Ken P. Fallon, III, chairman of the board of directors of Osteotech said in a statement. “We believe this is the best path forward for the Osteotech organization and products, and we look forward to finalizing this transaction smoothly and quickly.”
Medtronic’s offer comes amidst a struggle between Osteotech and a group of its shareholders that had most recently nominated four people to the company’s board.
The Medtronic-Osteotech transaction is subject to customary closing conditions, including approval by Osteotech’s stockholders and U.S. and foreign regulatory clearances.
OSTE shares were up by 63.71% to $6.45 at 1:06 p.m. ET in Nasdaq trading. The stock had traded between $2.55 and $6.47 this year.