< Piling on Arthur Andersen | Main | Signs of desperation at the Enron Task Force? >
November 04, 2005
Is the Lord of Regulation angling for J&J's support?
Let's see now. Johnson & Johnson has contracted to buy medical-device maker Guidant Corporation in a deal worth nearly $24 billion. However, J&J included in the deal some fairly sophisticated provisions that allow it to walk away in the event of a material adverse effect on Guidant's financial condition. J&J has given strong indications recently that it is wanting to walk on the deal, and Guidant has responded that it does not believe an MAE exists and that it expects J&J to consummate the deal.
So, so if you're J&J, how exactly do you come up with a sure-fire material adverse effect?
Well, how about New York AG ("Attorney General" or "Aspiring Governor," take your pick) Eliot Spitzer? Yesterday, the Lord of Regulation filed a lawsuit against Guidant alleging the the company concealed from the public a design flaw in one of its surgically implanted heart defibrillators.
No word yet on where and when the J&J-sponsored "Spitzer for Governor Rally" will be held. ;^)
Posted by Tom at November 4, 2005 08:40 AM
Trackback Pings
TrackBack URL for this entry:
http://mtcgi.kir.com/mt-trackbk.cgi/2570
Comments
The timing of the Spitzer suit certainly is fortuitous for J&J. J&J will, however, vehemently deny they had anything to do with it because otherwise the "Frustration of Closing Conditions" provision of the merger agreement would come into play. This provision essentially prevents a party from walking from the deal if they contributed to whatever triggered the walk-away right.
Posted by: Bill Sjostrom at November 4, 2005 01:02 PM
Are we safe to assume you aren't for Spitzer in 2006?
Posted by: Thomas at November 4, 2005 06:23 PM
Let's just say that I have not been approached to be campaign chairman. ;^)
Posted by: Tom K at November 5, 2005 05:08 AM
Post a comment
Thanks for signing in, . Now you can comment. (sign out)
(If you haven't left a comment here before, you may need to be approved by the site owner before your comment will appear. Until then, it won't appear on the entry. Thanks for waiting.)