The Financial Times is reporting that Johnson & Johnson (ticker: JNJ) has hired Citigroup to evaluate a possible bid for Serono (ticker: SRA). Citing people close to the situation, the article states that Johnson & Johnson is weighing its options following its failed bid for Guidant (ticker: GDT).
I am surprised by this revelation, assuming it’s true. I believe Serono would undoubtedly be an accretive asset for a large pharma company like J&J; however, given their appetite to enter the cardiac rhythm management business, I expected to hear more chatter about a bid for St. Jude Medical (ticker: STJ) than for Serono. Given the Tysabri overhang and the impending FDA Panel and ultimate FDA decision in March, I do not think J&J or any other company is in a rush to put in a bid for Serono. I believe potential suitors will sit on the sidelines until the FDA provides more clarity on Tysabri’s future.