Bausch & Lomb Inc, the eye care giant that announced plans early in May to sell itself to a private equity firm for US$65 a share, has received a competing offer of US$75 in cash and stock from Advanced Medical Optics Inc, Bausch announced on Thursday.
Because the new bid, valued at more than US$4 billion, contains a potentially volatile stock component of US$30 a share, it is not directly comparable with the original US$3.67 billion all-cash buyout offered by Warburg Pincus, the private equity firm.
In addition, a partial overlap in eye care products between Bausch, based in Rochester, New York, and Advanced Medical, based in Santa Ana, California, could raise antitrust questions and add uncertainty to how rapidly a deal could be completed.
As a result, analysts said, Warburg could still emerge as Bausch & Lomb's preferred suitor, with a sweetened offer in the US$70 to US$72 range. Bausch's shares, which closed on Tuesday before the Fourth of July holiday at US$68.64, fell as low as $67.66 early in the session on Thursday but later rose to US$72 before trading was halted when the Wall Street Journal reported the new offer online.
Advanced Medical's shares, by contrast, fell slightly after the news but before trading in its stock was halted. They ended higher for the day, at US$35.89, up from US$35.47 on Tuesday.
Advanced Medical's offer came on the last day in the 50-day period left by Bausch's agreement with Warburg allowing Bausch to solicit higher bids.
Although Advanced Medical had said in May that it was interested in acquiring Bausch, the offer came as a surprise to some analysts because Advanced Medical had subsequently been forced to undertake an expensive recall of Complete MoisturePlus, its leading contact lens solution, after an unusual number of users came down with eye infections.
Health regulators and the company are investigating the outbreak and Complete MoisturePlus' apparent links to it.
Last week, Advanced Medical told analysts it forecast a loss as high as US$1.15 a share on sales of US$1.05 billion to US$1.07 billion this year because of the recall, compared with its previous forecast of earnings up to US$1.55 a share on sales as high as US$1.18 billion.
Acquiring Bausch would help Advanced enter the market for contact lenses and give it a much stronger position in a better-known lens care solutions brand to go with its surgical implants and laser equipment.
However, Bausch's name in lens care has been tarnished by its own recall last year of ReNu With MoistureLoc, which was linked to an outbreak of fungal infections.
The provision that allowed Bausch to solicit Advanced Medical's bid is known as a go-shop provision. Go-shop provisions, aimed at ensuring that companies receive the highest possible price in a sale, have become increasingly popular but have rarely led to higher offers.
In Bausch's case, Advanced Medical may have been encouraged by the relatively low breakup fee in the Warburg deal. If Bausch ends up with another buyer, it must pay Warburg US$40 million, or about 1 percent of the transaction price. Such fees can run to 3 percent or higher.
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
CHINA REACTS: The patrol and reconnaissance plane ‘transited the Taiwan Strait in international airspace,’ the 7th Fleet said, while Taipei said it saw nothing unusual The US 7th Fleet yesterday said that a US Navy P-8A Poseidon flew through the Taiwan Strait, a day after US and Chinese defense heads held their first talks since November 2022 in an effort to reduce regional tensions. The patrol and reconnaissance plane “transited the Taiwan Strait in international airspace,” the 7th Fleet said in a news release. “By operating within the Taiwan Strait in accordance with international law, the United States upholds the navigational rights and freedoms of all nations.” In a separate statement, the Ministry of National Defense said that it monitored nearby waters and airspace as the aircraft
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique