News Column

Medtronic stock owners criticize deal, fearing tax hit

August 21, 2014

By Christopher Snowbeck, Pioneer Press, St. Paul, Minn.



Aug. 21--Long-time shareholders voiced plenty of frustration Thursday with a proposed acquisition that would take Fridley-based Medtronic's headquarters to Ireland.

The structure of the deal makes it a taxable event for shareholders, which means some who've held the stock for decades face the prospect of a hefty tax bill on their gains.

"This is the least shareholder-friendly proposal I have ever seen," said Arthur Binger, 79, of Maple Grove, in comments that drew applause from the crowd gathered for Medtronic's annual shareholder meeting in Mounds View.

Medtronic chief executive officer Omar Ishrak argued that the proposed deal to acquire Dublin-based Covidien will result in a medical technology giant that's better positioned for global growth, and to help hospitals and doctors provide cost-effective health care.

"Over time, the up-side potential for the stock and the company is tremendous," Ishrak said. "It's a transformative move."

But shareholder Patricia Hartlaub, 71, of New Brighton, argued that the prospect of long-term growth in the stock price is tough for long-term shareholders to appreciate considering their advanced age.

Such investors might not be around long enough to see the growth, but they will face in the short-term a tax bill that could force some to sell roughly one-third of their shares.

"It's a problem," Hartlaub said. In a line that drew chuckles from an audience that included many senior citizens, she said: "I think if you look out at the group of people here, as well as long-term stock holders -- long term for us is short."

Christopher Snowbeck can be reached at 651-228-5479. Follow him at www.twitter.com/chrissnowbeck.

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(c)2014 the Pioneer Press (St. Paul, Minn.)

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Source: Saint Paul Pioneer Press (MN)


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