Circon Rejects Bid By U.S. Surgical, Adopts Rights Plan
Circon Corp. is circling the wagons, rejecting U.S. Surgical Corp.'s unsolicited $230 million takeover bid and installing a so-called poison-pill shareholder rights plan.</br></br>Circon, a Santa Barbara, Calif., maker of surgical products, said it wasn't for sale and that the offer of $18 a share was "inadequate" in the opinion of its financial adviser, Bear Stearns & Co.</br></br>Shares of Circon yesterday fell 62.5 cents to $17.125 in Nasdaq Stock Market trading, after jumping to over $19 following the tender offer, announced on Aug. 2. Circon shares were trading under $9 in late July, and U.S. Surgical points out that the offer was an 83% premium over the average closing price of the stock for the 10-day period prior to the bid. Yesterday, U.S. Surgical rose 37.5 cents to $35.75 in composite trading on the New York Stock Exchange.</br></br>The shareholder rights plan effectively stops U.S. Surgical, a Norwalk, Conn., maker of surgical instruments, from acquiring 15% or more of the company by making it prohibitively expensive through the issuance of shares at a discount.</br></br>U.S. Surgical purchased about 8% of the shares of Circon before announcing its bid. Company insiders and former executives own a significant stake in Circon.