Circon Abandons Independence, Solicits Bids

Medical devices maker Circon Corp., target of the nation’s longest-running hostile takeover, on Tuesday gave up its fight to stay independent and put itself on the auction block.

The development confirmed widespread views that Circon has been informally soliciting buyers for more than a month.

But the statement released by the Santa Barbara-based company did not address whether the company is inviting bids from U.S. Surgical Corp., which has been trying to buy the company for more than two years. It also did not say whether Tyco International, which in May agreed to buy U.S. Surgical for $3.3 billion, would be invited to bid.

“The types of proposals of interest range from significant distribution alliances to merger or sale of the company,” Circon said in a news release. It also said there was no assurance that any proposal would result in a deal.

Bear, Stearns & Co. is handling the process for Circon.

Sources familiar with Circon have told Reuters that the company began looking for buyers in late July due to declining sales, intense competition and an upcoming stockholders meeting that could give U.S. Surgical control of its board.

Circon declined further comment.

Shares of Circon rose $1.13 to close at $15.25 on Nasdaq. U.S. Surgical shares gained $1.38 to $46.38 on the New York Stock Exchange.

But a source familiar with Circon said a handful of medical companies have recently expressed bidding interest. Pharmaceutical giant Johnson & Johnson has been named by market sources as one prospective buyer.

A spokesman for Johnson & Johnson said the company does not comment on market rumors.

U.S. Surgical of Norwalk, Conn., first launched a bid for Circon on Aug. 2, 1996. The original bid was valued at $18 per share, or $230 million, but U.S. Surgical changed the offer several times to reflect Circon’s financial performance. Its offer now stands at $16.50 per share.