Bausch & Lomb Inc. plans to reject a $4.23 billion takeover bid by Advanced Medical Optics Inc. unless the Santa Ana company can overcome shareholder opposition to the deal.
In a letter to Advanced Medical Chief Executive Jim Mazzo, Bausch’s board said Tuesday it’s unlikely to endorse the offer unless it sees “credible evidence that holders of a significant percentage of the outstanding AMO shares would affirmatively support the proposed acquisition of Bausch & Lomb.”
ValueAct Capital Partners LP, a San Francisco-based hedge fund that’s Advanced Medical’s third-largest shareholder, has aggressively come out against the deal.
Rochester, N.Y.-based Bausch & Lomb asked for a response to its concern after Advanced Medical’s board meets on Thursday.
In a statement Tuesday, Advanced Medical said it continues to “believe in the strategic and financial rationale for this combination and are confident in our ability to consummate the transaction.”
“We are evaluating B & L;’s letter and will respond to it in due course,” the company said.
Advanced Medical’s cash-and-stock bid competes with an existing offer of $3.67 billion from private equity firm Warburg Pincus LLC and is 9% higher than what Bausch & Lomb was trading at when the offer was made.
Separately, Advanced Medical said it expected to provide more information on its launch plans for a new contact lens solution in the U.S. during its second-quarter earnings call set for Aug. 2.
The company recalled its Complete MoisturePlus contact lens solution in late May because of a possible link to a rare eye infection.
