While it may look like a record deal, in so many respects this is a sober one compared to KKR s 1989 buyout of RJR. The firms are committing double the equity, and the size of the bets relative to their funds is fractional compared to RJR.
The surprise counterbid puts J&J on the back foot. It cut its bid, saying Guidant was worth less than it thought. Raising now would be hard. Boston's tactics have been smart, but has it also been smart on value? The fall in its share price suggests investors aren't yet convinced. Boston's tactics have been smart. But has the group been smart on value?