Guidant Corp. accepted a sweetened offer of $23.3 billion in cash and stock late Wednesday from Johnson & Johnson, which has pursued the medical device maker for more than a year.
J&J;'s latest offer topped its former $21.5-billion bid but fell short of a rival $25-billion bid from Boston Scientific Corp. In a statement, Boston Scientific said it planned further talks with Guidant and would "vigorously pursue this transaction to its completion."
Guidant's board said it would recommend that shareholders vote in favor of the revised J&J; deal during a scheduled Jan. 31 meeting, according to a joint statement from both companies. Both boards unanimously approved the revised J&J; offer, the companies said.
The latest J&J; acquisition proposal -- its third -- calls for the company to pay $37.25 in cash and 0.493 share of its common stock for each Guidant share outstanding.
The transaction would have a per-share value of $68.06 based on Wednesday's market close. Boston Scientific's cash-and-stock offer is valued at $72 a share, including $36 in cash.
Guidant Chairman James Cornelius said the J&J; deal would provide certainty for shareholders and employees.
"Together with Johnson & Johnson, we will have the resources to continue to build upon the existing Guidant businesses in our pursuit of meaningful innovations to address cardiovascular disease," he said.
In December 2004, New Brunswick, N.J.-based J&J; offered $25.4 billion for Guidant but lowered it to $21.5 billion 11 months later because of Guidant's product recalls and investigations by regulators.
Since June, Indianapolis-based Guidant has recalled or issued safety warnings for about 88,000 heart defibrillators and almost 200,000 pacemakers. The company also faces numerous lawsuits.
Last month, Guidant adjusted its fourth-quarter revenue estimates below Wall Street expectations after the recalls hurt the company's market share more than expected.
Natick, Mass.-based Boston Scientific announced its bid for Guidant in early December and officially presented the deal to Guidant's board Sunday.
Spokesmen for J&J; and Boston Scientific said neither company would have additional comment Wednesday. Guidant executives did not return calls seeking comment.