Citing inadequate time to respond to Bausch & Lombs request for more information, Advanced Medical Optics has withdrawn its offer to acquire B&L for $75 a share. The withdrawal comes following several letters between the two companies in which B&L wanted proof that AMO could muster enough shareholder support.
On May 16, B&L agreed to be acquired by Warburg Pincus for $65 a share in cash. The merger agreement with Warburg Pincus gave B&L 50 days to solicit for superior proposals.
The following week, AMO said it would consider making a superior offer, and on July 5, the company confirmed that it proposed to acquire B&L for $75 a share in cash and AMO stock. That deal would have allowed AMO to expand its offerings of contact lens care products and IOLs, plus it would have provided AMO entry into the contact lens and pharmaceutical arenas.
Instead, you remain intent on delivering Bausch & Lomb to Warburg Pincus at $65 per share, a transaction that is inferior to AMOs proposal both in terms of value and the ability for the Bausch & Lomb shareholders to participate in the significant synergies that combining AMO and Bausch & Lomb would create, wrote James V. Mazzo, AMOs chairman, president and CEO, in his letter to B&Ls board in which he withdrew AMOs offer.
B&L had questioned whether AMO could muster up enough shareholder support, especially since ValueAct Capital, which owns almost 15% of outstanding AMO shares, said it would vote against the deal.
In a letter dated July 24, B&L requested that members of its Special Committee of the Board of Directors be able to meet with major shareholders and AMO representatives to evaluate the likelihood of them voting in favor of the proposal. AMO said it would provide concrete, credible evidence that its major shareholders would support the acquisition. But in another letter, dated July 29, B&Ls committee said that based on its own discussions with representatives of AMOs largest stockholders, we believe there is substantial uncertainty with respect to AMOs ability to secure AMO stockholder approval.
B&L offered AMO until noon on August 3 to provide concrete, credible evidence of its ability to win shareholder support. In response, AMO said that it would need several weeks to provide its shareholders with enough detailed information on which to base their decision as well as permission to disclose non-public information regarding the combined companiesa request B&L denied.
But the acquisition by Warburg Pincus is not a done deal. News outlets have reported that prior to AMO withdrawing its offer, Healthcor Management L.P. and Sandell Asset Management Corp., which own a combined stake of 4% of B&L, said they would vote against the takeover by Warburg Pincus in favor of an offer from AMO. Also, other shareholders have filed lawsuits to stop the sale of B&L to Warburg Pincus.