Bausch & Lomb: Without additional assurances, Advanced Medical Optics proposal may not be superior

By Lisa Kerner

Charlotte, N.C., July 24 - Bausch & Lomb Inc. notified Advanced Medical Optics Inc. that unless revised, its proposal is not likely to be considered superior, according to a form 8-K filing with the Securities and Exchange Commission.

Under its proposal, Advanced Medical Optics would acquire Bausch & Lomb for $75 per share in cash and stock in a transaction valued at $4.3 billion. The deal is subject to termination of Bausch & Lomb's merger agreement with affiliates of Warburg Pincus LLC, under which Warburg would acquire all Bausch & Lomb shares for $65 each in cash.

"Without further assurances as to value and certainty of consummation and, in particular, without concrete, credible evidence that holders of a significant percentage of the outstanding AMO shares would affirmatively support the proposed acquisition of Bausch & Lomb by AMO, the special committee and the board intend to revoke AMO's designation as an excluded party under the Warburg Pincus merger agreement," a letter from Bausch & Lomb, signed by special committee chairman William H. Waltrip, stated.

Advanced Medical Optics issued a statement in response to Bausch & Lomb saying it continues to believe in the strategic and financial rational for bringing the two companies together. In addition, Advanced Medical Optics expressed confidence in being able to consummate its transaction.

"We reaffirm our $75 per share offer, which we believe fully and fairly values Bausch & Lomb. It is clearly superior and would deliver more value to Bausch & Lomb shareholders than the current $65 per share merger agreement with Warburg Pincus. Advanced Medial Optics' proposed transaction would also allow both companies' shareholders to share in the upside potential of a combination that we believe will deliver significant cost-saving opportunities. We are evaluating Bausch &Lomb's letter and will respond to it in due course," the statement said.

The board of Advanced Medical Optics is scheduled to review the status of its proposal on Thursday. The company has until noon on Friday to provide Bausch & Lomb with additional information.

Advanced Medical Optics is a Santa Ana, Calif.-based provider of ophthalmic surgical devices and eye care products.

Based in Rochester, N.Y., Bausch & Lomb is an eye health company.

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