Alcon, Broadwood trade blows in fight for STAAR Surgical's future

Investing.com -- The takeover battle over STAAR Surgical Company (NASDAQ: STAA) escalated Tuesday as Alcon AG (NYSE: ALC) and Broadwood Partners traded public attacks, marking a more personal turn in the months-long dispute over the company’s $28-per-share sale.

Alcon, which is seeking to acquire STAAR in an all-cash transaction, released an investor presentation defending the deal and accusing Broadwood of attempting a “silent takeover” of the company. The Swiss eye-care giant argued that Broadwood’s recently announced plan to oust STAAR’s board and install its own slate “risks disenfranchising the broader stockholder base and undermining the value-maximizing opportunity currently on the table.”

The presentation took direct aim at STAAR’s two largest dissenting shareholders, Broadwood and Yunqi Capital, questioning their investment track records and suggesting their opposition is self-serving.

Alcon reiterated that its $28 offer represents a premium “significantly exceeding” comparable MedTech transactions, while urging STAAR’s board to amend the merger agreement to allow a full, unencumbered go-shop period, a clause that would let STAAR solicit other bids but could also buy Alcon time to rebuild support for the deal.

Broadwood, which holds a 27.5% stake built up over three decades, swiftly fired back. In a statement released Tuesday, Broadwood founder Neal Bradsher called Alcon’s presentation “replete with fallacious arguments and baseless claims” and criticized STAAR’s board for approving “misleading statements” about the company’s prospects and its major investors.

“Given the overwhelmingly negative reaction of STAAR shareholders (and all three proxy advisors) to the timing, process, and price of the proposed Alcon transaction, there is no reason for the Board of Directors to take direction from Alcon,” Bradsher said. “After this deal is rightly rejected, the Board will have complete freedom to decide when and how, if at all, to conduct a sale process.”

Bradsher added that Alcon and STAAR had resorted to “ad hominem attacks,” defending Broadwood’s investment record while contrasting it with Alcon’s own share performance.

Alcon, in its presentation, criticized Broadwood’s activist record, highlighting a series of companies that have underperformed the S&P 500 since Broadwood’s initial investments, a comparison Bradsher dismissed as selective and misleading. “If Alcon had generated annualized shareholder returns since its spinout in 2019 on par with our record, then Alcon’s stock would be trading at more than $150 per share, instead of $75,” he said.

As Investing.com previously reported, roughly 72% of STAAR’s outstanding shares had already voted against the merger ahead of the original October 23 shareholder meeting, with a little over 18% voting for. STAAR has since delayed the special meeting to December 3 to allow ongoing negotiations, including over Alcon’s proposed go-shop amendment. According to STAAR’s supplemental proxy materials, Alcon remains steadfast in its refusal to raise the deal price.

All three major proxy advisory firms, ISS, Glass Lewis, and Egan-Jones, have recommended shareholders vote against the deal.

With the vote now approaching, shareholders will have to decide whether to take Alcon’s cash offer or side with Broadwood’s bid to reclaim control of STAAR’s future.

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