On Thursday, Smith & Nephew (NYSE: SNN) said it was confident it was on the right course after the Financial Times reported that three major investors were pushing for a break-up of the medical device maker.
The UK-headquartered company should spin off its orthopedics division, which makes replacement hip and knee joints if management could not improve its performance, the group’s top 20 shareholders told the FT.
A Smith & Nephew spokesperson said: “There is clear momentum across the business, with operational fixes in place, sharper commercial execution – including in US Orthopaedics where both our Knee and Hip Implants have returned to growth.”
Britain’s largest medical products maker by market value, Smith & Nephew slashed its annual underlying revenue growth forecast in October on weak China demand.
“While the impact of China was a challenge for us in the quarter, we are confident we are on the right course,” the spokesperson said.
Shares in Smith & Nephew (NYSE: SNN), which have lost about 10% of their value year-to-date, were flat in premarket trade.
A private equity firm could be a potential buyer for the division, which is the largest for Smith & Nephew in terms of revenue, the FT reported, citing two investors.
Activist investor Cevian had built a 5% shareholding in Smith & Nephew in July, making it the second-largest shareholder of the medical device maker, according to LSEG data.
The FT report did not name the shareholders.
