Epilepsy Device Maker Rejects Medtronic Offer

Medical device company Cyberonics Inc. spurned an unsolicited $480-million bid from larger rival Medtronic Inc., saying it preferred to remain independent and pursue developments in its fast-growing businesses. Houston-based Cyberonics, which sells a patented electrical stimulation device to treat epilepsy, said its board had unanimously voted to pursue an independent course after analyzing the $26-a-share stock offer with financial advisor Morgan Stanley Dean Witter. Minneapolis-based Medtronic, which makes pacemakers, heart valves and other devices, declined to say whether it would pursue a hostile takeover or proxy fight. An acquisition of Cyberonics would strengthen its fast-growing neurological and spinal division. Cyberonics revealed its decision after the close of regular trading. News of the offer sent Houston-based Cyberonics shares surging $9.88, or 62%, to close at $25.94 on Nasdaq. Medtronic closed up 19 cents at $51.50 on the NYSE.