Johnson & Johnson Makes Bid for Cordis : Health care: The $1.6-billion hostile offer would position the conglomerate well in the clogged-artery market.

NEW YORK — Johnson & Johnson on Thursday launched a $1.6-billion hostile takeover bid for Cordis Corp., seeking to gain a major foothold in the fast-growing market for treating clogged arteries.

The cash tender offer amounts to $100 a share, but Johnson & Johnson also said it is willing to negotiate a deal for $105 a share in stock, which would value Cordis at $1.7 billion.

Cordis shares jumped $21.625 to close at $107.625 on the Nasdaq market, above either offered price, a sign that investors expect an even higher bid to emerge. Johnson & Johnson rose 87.5 cents to $79 on the New York Stock Exchange.

Johnson & Johnson said it resorted to a tender offer--in which a company does an end run around management and appeals directly to shareholders--after Cordis officials refused requests for a meeting.

But it said it would end the hostile bid if Cordis signed a definitive agreement for a stock swap merger that would be tax-free to shareholders.

Cordis said it had “no definitive comment” on the tender offer, but said its board and management “will evaluate and react” to the proposal.

Industry analysts said the merger would allow J&J; to market its own hot-selling coronary device with those made by Cordis, giving the health care giant a major advantage over competitors.

J&J;, a diversified health care company based in New Brunswick, N.J., has built a booming business selling coronary stents, tiny tube-shaped steel devices used to hold open damaged arteries.

Miami-based Cordis is a leader in angioplasty, which uses balloon catheters to deliver the stent to the site of a closed or blocked artery. Once the stent is in place, the balloon is deflated and removed.

Cordis also has a leading diagnostic cardiology business, which includes devices to determine where an artery is blocked, analysts said.

“You would have a very powerful bundling combination that nobody else has,” Alex. Brown analyst Jonathan Osgood said.

“If they combine Cordis and J&J;’s stent business, you’d have a business that’s probably closing in on $900 million in revenues, and both generate lots of cash,” he said.

“Cordis and Johnson & Johnson Interventional Systems together will create one of the leading worldwide vascular disease management companies,” J&J; Chairman and Chief Executive Ralph Larsen said in a statement.

The combined company will retain the Cordis name and be based in Miami, Larsen said.

Wall Street takeover specialists and industry analysts predicted Cordis would eventually agree to a stock swap merger, but at a higher price of $110 to $115 a share.

“There’s no question in my mind that this is just a starting point,” Piper Jaffray analyst Archie Smith said.

The match between J&J; and Cordis had been widely expected on Wall Street, but few had thought the health care giant would make an unsolicited tender for the company.

“The fact that they announced the deal is not at all surprising,” Smith said. “What is surprising is that they decided to go forward on a hostile basis in an industry where hostile tender offers are virtually unheard of.”

A J&J; spokesman said the Cordis action was “probably the first unsolicited tender offer” made by the company.

Cordis last year earned $37.4 million on sales of $336.5 million. Johnson & Johnson earned $2 billion on sales of $15.7 billion in 1994.