Hip replacement group gets takeover approach

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Shares in Corin, the UK artificial hip manufacturer, shot up more than 20 per cent yesterday, as the group confirmed it had received a bid approach which "may or may not lead to an offer being made for the company".

Corin confirmed that talks were under way, but it would not reveal the name of its pursuer. However, analysts speculated that the most likely bidder was Stryker, an American orthopaedics firm. Other possible suitors include Corin's US rivals, Biomet, Johnson & Johnson, Zimmer and Medtronic. Michael King, an analyst for Code Securities, said: "The only large orthopaedics maker who doesn't have a metal-on-metal hip resurfacing programme is Stryker." Corin is on course to become the first company to receive US regulatory approval for its metal-on-metal hip replacement, which provides an alternative for younger patients to the traditional technique which involves removing part of the bone.

Bid rumours have surrounded Corin for the past few months. However, Smith & Nephew, which has been seen as a potential bidder, yesterday ruled itself out of any auction for the company.

Shares in the company rose 64.5p to 379.5p on the news yesterday, giving the company a market value of £153m. Last month, Corin reported an 18 per cent rise in first half pre-tax profits to £2.7m, as sales of its hip and knee implants soared. Cormet, its hip replacement, saw a 63 per cent rise in sales.

Code Securities' Mr King said the metal-on-metal implants could steal as much as 10 per cent of the world's $5bn (£2.8bn) hip replacement market.