The $10bn-market for heart rhythm products is expected to grow

However, Boston Scientific, J&J's rival for Guidant, has refused to give up.

Guidant already had accepted J&J's first offer when Boston Scientific entered the bidding.

J&J has increased the cash part of its offer and has now tabled $23.2bn (�13bn) for Guidant, less than the $25bn put down by Boston Scientific.

Analysts said they expected the takeover battle to rumble on.

"Boston Scientific will not go quietly into the night," said Steve Brozak, an analyst at WBB Securities.

Both firms are attracted by the growth potential for heart devices and reckon Guidant's products would compliment their existing products such as cardiac stents, which are used to keep coronary arteries open and unclogged.

'Winner's curse'

Guidant told Boston Scientific that it would be willing to hold additional talks and listen to any new offer, the Reuters news agency quoted sources familiar with the situation as saying.

Boston Scientific's share price Guidant's share price J&J's share price

J&J appears to have a slim advantage as its talks are well advanced and it has already won regulatory approval for the purchase, analysts said.

However, they warned that the deal was vital for Boston Scientific's survival as it probably would either have to buy a company or be bought itself.

The bidding for Guidant has been long and somewhat messy after J&J cut its original offer price because Guidant had to recall some of its products.

That opened the door for Boston Scientific and since then Guidant and its shareholders have been benefiting.

"Whenever you have multiple bidding... the firm that wins usually ends up paying too much," said Allen Michel, a merger and acquisition professor at Boston University School of Management.