STAAR Surgical Investors Reject Sweetened Alcon Takeover Bid
Major shareholders have rebuffed an improved $30.75 per share offer, citing significant undervaluation and a flawed sale process, placing the deal in jeopardy.
A sweetened acquisition offer for STAAR Surgical (NASDAQ: STAA) from eye-care giant Alcon (NYSE: ALC) has been formally rejected by several of the company's top investors, who argue the proposal fundamentally undervalues the innovative lens maker.
The shareholders rebuffed an improved offer of $30.75 per share, a price point hovering just shy of the stock’s 52-week high of $30.81. The rejection introduces significant uncertainty into the future of the proposed merger, signaling a protracted battle may lie ahead.
News of the pushback sent STAAR’s shares tumbling, with the stock closing down 4.4% at $24.27 in recent trading. The decline suggests growing investor concern that the deal could collapse, erasing the premium offered by Alcon.
In a statement, the dissenting shareholders criticized not only the price but also the nature of the negotiations. They cited a "flawed sale process" as a key reason for their rejection, suggesting a belief that the board has not adequately pursued maximum value for the company. This powerful rebuke from key institutional holders, who collectively own a significant portion of the company, creates a formidable obstacle for Alcon's takeover ambitions.
STAAR Surgical, with a market capitalization of approximately $1.16 billion, is a key player in the ophthalmic surgery market. The company designs and manufactures implantable lenses, most notably its EVO Visian ICL line, which are used in refractive surgery as an alternative to LASIK. Proponents argue that STAAR’s growth potential in international markets, particularly in Asia, is not fully reflected in Alcon's offer.
The standoff highlights a stark disagreement over STAAR's intrinsic value. While Alcon’s $30.75 bid represents a substantial premium from the stock's 52-week low of $13.50, the dissident investors contend it fails to capture the company’s long-term prospects. According to reports, the investors believe the offer is an opportunistic attempt to acquire a unique asset before its full growth trajectory is realized.
Institutional investors hold a commanding position at STAAR, with ownership exceeding 100% of the float, indicating a high degree of conviction and concentrated power. This shareholder structure gives significant weight to the dissenting voices and complicates Alcon’s path forward.
The central question now is Alcon's next move. The Swiss-American medical company could choose to raise its bid further to win over the holdouts, a move that would test its valuation discipline. Alternatively, Alcon could walk away from the deal, which would likely put further downward pressure on STAAR's stock price. A third possibility is that the shareholder pressure could force STAAR's board to seek out other potential bidders.
For now, the fate of the deal rests on bridging the considerable gap in valuation expectations. The market, having pushed the stock price well below the offer, is bracing for continued volatility as STAAR Surgical's management and its determined shareholders navigate this critical juncture.