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LONDON (Reuters) - U.S. medical device maker Stryker Corp (N:SYK) is examining a bid for Britain's Smith & Nephew Plc (L:SN) as a regulatory restriction barring an offer comes to an end, Bloomberg reported on Monday, citing unnamed sources.
Shares of Smith & Nephew, which makes artificial knees and hips, rose as much as 10 percent.
The stock was up 3.4 percent at at 11.36 pounds at 1518 GMT after the report was published. Three traders cited the report as the reason behind the stock's gain.
Stryker shares were up 0.3 percent at $90.38.
"Smith & Nephew never comments on speculation," a spokeswoman said. Smith & Nephew has a market capitalisation of about 9.7 billion pounds ($15.2 billion).
Stryker did not immediately respond to requests for comment.
The company denied on May 28 that it intended to make a bid for its UK rival, responding to a request from Britain's Takeover Panel, the regulatory body in charge of deal activity.
That followed media reports that it could make an offer.
By denying its interest in May, Stryker ruled itself out of bidding for six months under a "standstill agreement" that is due to end on Nov. 28.
Analysts have frequently speculated that Smith & Nephew may attract takeover interest.
Johnson & Johnson (N:JNJ) approached Smith & Nephew five years ago on a possible offer, according to people familiar with the matter.
Bloomberg said that Michigan-based Stryker was in talks regarding the financing of a deal and the potential monopoly issues with its advisers.
U.S. healthcare companies have sought to acquire a number of British-based rivals so far this year, with many deals largely driven by potential tax savings.
However, recent actions by the U.S. Treasury have made such deals less attractive.
(Reporting by Vikram Subhedar, Francesco Canepa, Alistair Smout and Sarah Young in London and Vidya L Nathan; Editing by Mark Potter, Keith Weir and Ted Kerr)