Medical device maker Guidant has accepted a higher takeover offer from Johnson & Johnson of $24.2 billion dollars, turning its back on a $24.8 billion offer from rival bidder Boston Scientific.

The battle for Guidant became a bidding war at the end of last week after J&J and then Boston Scientific raised their offers to try to win Guidant. J&J’s latest offer – made on Saturday - raises the cash component of its bid and brings the total to $71 a share.

On Friday, Boston Scientific raised its own bid by a dollar to $73, but set a 4pm deadline for Guidant to accept the offer. It then extended that deadline by two hours towards the end of the working day and subsequently withdrew the release offering the extension without further comment.

Analysts suggested the deadline was removed when it emerged that Guidant and J&J were starting negotiations on a revised agreement.

J&J’s latest hike brings the offer above the threshold that shareholder Guidant shareholder Elliott Associate said last week was the minimum they would expect with Boston Scientific’s $73-a-share bid on the table. But despite that Elliott, which holds 3 million Guidant shares, has already said it will oppose the deal.

Nevertheless, Guidant’s management, which seems to have favoured J&J as a partner throughout the bidding process, was swift to approve the new deal and once again urged shareholders to vote in favour at their meeting on January 31.

"This agreement with Johnson & Johnson provides significant financial value and certainty for shareholders," said James Cornelius, Guidant’s chairman and chief executive.

Johnson & Johnson originally offered $25.4 billion for Guidant in December 2004, but lowered the amount to $21.5 billion 11 months later because of a major product recall at Guidant, as well as regulatory investigations that it said had affected the business's value. Boston Scientific made its $25 billion bid in December, and tabled a formal offer January 8.

Both companies want to grab Guidant in order to get their hands on part of the fast-growing $10 billion market for pacemakers and implantable cardiovascular defibrillators (ICDs).