STAAR Surgical's Top Investors Reject Sweetened Alcon Offer, Cite Flawed Sale Process

Yunqi Capital Limited, which holds a 5.1% stake in STAAR Surgical Company (NASDAQ:STAA), issued a letter to shareholders on Wednesday.

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The letter comes following the close of STAAR's 30-day go-shop period and Alcon Inc.'s (NYSE:ALC) revised acquisition offer of $30.75 per share.

Yunqi reiterated its firm opposition to the deal.

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In August, the eye care company Alcon agreed to acquire STAAR Surgical, the manufacturer of the implantable collamer lens, for a total equity value of approximately $1.5 billion.

On Tuesday, Alcon amended the terms to $30.75 per share in cash. This purchase price increase represents an additional approximately $150 million in equity value for the stock.

The transaction now represents a total equity value of approximately $1.6 billion.

Broadwood Partners, which owns a 30.2% stake in STAAR, opposed the proposed sale.

On Tuesday, the shareholder said that the latest price increase underscores how deeply flawed the original sale process was and how it failed to maximize shareholder value.

It notes the new price remains roughly half of what Alcon offered twice in 2024, even though STAAR's projections have not materially changed.

Are Shareholders Losing Out Again?

Yunqi Capital on Wednesday said, "We strongly believe that it is still not the right time to sell the Company – regardless of the outcome of the go-shop period."

The letter adds that STAAR's sale process has been mishandled from the beginning. The go-shop, structured in a way that favored Alcon, was unlikely to attract competing bidders.

The company's disclosures have also lacked transparency, further weakening confidence in the process.

A 30-day go-shop was far too short to conduct a credible market check for a global medical device company with complex regulatory and manufacturing requirements.

Provisions that required sharing all bidder information with Alcon and allowed Alcon days to review any superior bid discouraged alternative buyers from engaging.

Process concerns deepened during execution. STAAR says it contacted 21 parties, yet Yunqi Capital says the pool of potentially interested strategic and financial buyers is significantly larger.

Only two parties signed NDAs, and according to Broadwood Partners, at least one credible bidder was asked to accept a multi-year standstill to access diligence. Such restrictions likely deterred additional bidders.

Yunqi Capital also disagrees that the revised $30.75 price represents compelling value.

STAAR's temporary headwinds are cyclical, not structural, as the company itself has repeatedly emphasized.

Short-term price averages do not capture its long-term growth trajectory.

STAA Price Action: Staar Surgical shares were down 5.65% at $23.95 at the time of publication on Wednesday, according to Benzinga Pro data.

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