Broadwood Partners questions STAAR Surgical board over Alcon sale process

Broadwood Partners, which owns 27.5% of STAAR Surgical Company (NASDAQ: STAA), issued a letter questioning the board's diligence in reaffirming support for the proposed acquisition by Alcon Inc. (NYSE: ALC).

The letter follows a Glass Lewis & Co. recommendation against the sale, which disclosed that STAAR's CEO and Chair failed to inform fellow directors about inbound strategic interest from at least one potential buyer. Glass Lewis confirmed this information during its research process for the proxy advisory recommendation issued October 7.

According to the letter, STAAR's board issued a press release reiterating unanimous support for the transaction within hours of the Glass Lewis report. Broadwood questioned whether directors had adequate time to consider the new information and fulfill their fiduciary duties.

Broadwood asked whether the board met to discuss the revelations, if the financial advisor reassessed the transaction's fairness, and whether previously uninformed directors learned about the undisclosed strategic interest. The investment firm also questioned if there was proper discussion about other potential expressions of interest.

"At worst, this Board has again given proper process short shrift and, at best, has acted so swiftly as to lack credibility altogether," wrote Neal Bradsher, Broadwood's founder and president.

The letter cited concerns about the fairness opinion's integrity and valuation issues raised by Glass Lewis. Broadwood continues to urge shareholders to vote against the proposed acquisition at the special meeting scheduled for October 23.

The proposed Alcon transaction was announced August 5. Broadwood has filed a definitive proxy statement with the SEC opposing the deal.

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