Baxter Nears $10 Billion Deal to Buy Hill-Rom, Dow Jones Says

(Bloomberg) -- Baxter International Inc. is in advanced talks to acquire Hill-Rom Holdings Inc. for about $10 billion, Dow Jones reported, citing people familiar with the matter. 

The deal values the medical equipment maker at around $150 a share, Dow Jones reported. That’s a 13% premium to the stock’s closing price of $132.90 on Friday. The transaction is expected to be reached in the middle of the week, and the talks may still fall apart, it said. 

The new offer comes a month after Hill-Rom rejected a $9.6 billion takeover offer from Baxter, Bloomberg News reported earlier. Hill-Rom saw Baxter’s proposal of about $144 per share as too low, according to people with knowledge of the matter. Baxter was expected to return with a higher bid, the people said.

Hill-Rom, based in Chicago, makes a range of hospital equipment including stretchers, patient monitors, operating tables and electrocardiographs, according to its website.

Medical device and supply companies have been consolidating as they seek to sell a wider range of products to their hospital clients. Large deals such as Medtronic Plc’s $43 billion acquisition of Covidien Plc and the $25 billion purchase of St. Jude Medical Inc. by Abbott Laboratories have prompted other firms to pursue scale through acquisitions.

Hill-Rom shares have climbed 36% this year, almost twice the gain of an S&P 500 index tracking health-care companies, while Deerfield, Illinois-based Baxter has slumped 7.8%. Both stocks trade at about 21 times estimated earnings. 

Baxter said in an emailed response that it wouldn’t comment on rumors or speculation. An official at Hill-Rom didn’t immediately respond outside of usual business hours.  

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