Surgical devices maker ConMed (NSDQ:CNMD) got a little Wall Street love after news sources reported today that the company may be up for sale.
Anonymous sources told the Reuters news service that ConMed has begun soliciting interest from larger companies, although there is no guarantee yet that the company will find a buyer or follow through with an exit. ConMed representatives refused to comment on the rumors, Reuters reported.
The news preceded a surge in CNMD shares, which gained 6.7% to trade at $48.28 as of about 1:40 p.m. EST today.
The buyout speculation comes amid a tough time for ConMed, which has since late last year been fighting a proxy war with activist investor group Voce Capital Management. Voce issued a public letter to ConMed in November, criticizing the company’s leadership and calling for a changes to its board of directors.
"ConMed is unquestionably family-run – the Corasanti clan members pull all the strings and pamper themselves royally – yet it’s not family-owned, as they hold very little of its stock," according to Voce’s 11-page letter. "ConMed is a strategically attractive asset trapped within a dysfunctional public vehicle that will never achieve its potential in current form."
ConMed founder Eugene Corasanti agreed in February to step down as board chairman in a deal struck with shareholder Coppersmith Capital Management, adding Coppersmith managing partner Jerome Lande and former Stryker (NYSE:SYK) CFO Curtis Hartman as directors. In return, Coppersmith, which picked up a 5.9% stake in ConMed Jan. 27, agreed to support the company’s other nominees for the board at the upcoming shareholder’s meeting.
The proxy war got ugly later in February after serious allegations surfaced against newly appointed director Hartman. Voce re-entered the fray, saying that Stryker settled "multiple" sexual harassment allegations made against Hartman during his time in Kalamazoo, Mich. Voce had nominated its own slate of 4 new directors, including managing director J. Daniel Plants.
Voce cited an Alere proxy statement filed in August 2013 that named Hartman as the center of 3 sexual harassment claims that were "settled confidentially for substantial monetary payments."
ConMed recently revealed that it would delay its annual shareholders meeting, saying it plans to schedule the meeting for sometime before July 31.
