LONDON (Reuters) - Privately owned U.S. orthopedics group Biomet is set to begin informal talks with Smith & Nephew about a potential 15 billion pounds ($23.6 billion) merger, the Telegraph newspaper said on Friday, without citing sources.
Merging the two groups would block attempts by Johnson & Johnson
Shares in Smith & Nephew (S&N) hit a record high on Monday after a report it received a bid last month from Johnson & Johnson, which was not disclosed.
The Biomet deal would see the combined group relist on the London market, with S&N shareholders taking the lion's share of the equity, the Telegraph said.
Because of the levels of debt attached to Biomet, a cash acquisition of S&N would not be possible, creating the need for a complex merger structure. Although no formal offer has been made, both sides have been examining the possible structure on the table, it said.
Officials at S&N were not immediately available to comment on the newspaper report.
(Reporting by Ben Hirschler and Paul Sandle; Editing by Hans Peters)