Broadwood opposes Alcon’s acquisition of STAAR Surgical

NEW YORK - Broadwood Partners, STAAR Surgical Company’s (NASDAQ:STAA) largest shareholder with approximately 27.5% ownership, announced Wednesday its opposition to the proposed $28 per share acquisition by Alcon Inc. (NYSE:ALC), a prominent player in the Healthcare Equipment & Supplies industry with a market capitalization of $37.9 billion. According to InvestingPro data, Alcon is currently trading near its 52-week low of $75.14, with a P/E ratio of 34.8x.

In a letter to fellow stockholders, Broadwood criticized the timing, process, and price of the transaction announced on August 5. The investment firm argued that STAAR’s recent business challenges were temporary and that the company is forecasting a return to growth and profitability. Meanwhile, InvestingPro analysis shows Alcon maintains strong financial health with $10.03 billion in revenue and a comfortable current ratio of 2.6, indicating solid liquidity position.

Broadwood claimed the acquisition process was flawed, noting it took less than a month and did not involve proactive outreach to alternative buyers. The firm also raised concerns about potential conflicts of interest, stating that STAAR’s Board Chair had a consulting relationship with Alcon that paid "hundreds of thousands of dollars over a seven-year period."

According to Broadwood, Alcon had proposed to acquire STAAR for $62 per share less than a year ago, making the current $28 offer a 55% decrease despite improved business outlook.

The investment firm also highlighted that STAAR executives would collectively receive approximately $55 million in immediate compensation if the deal closes, with the CEO alone receiving about $24 million after just five months of work.

Broadwood urged stockholders to vote against the proposed merger at the special meeting scheduled for October 23. Another major shareholder, Yunqi Capital Ltd., which owns 5.1% of outstanding shares, is also opposing the transaction.

STAAR Surgical develops implantable lenses for vision correction. The company has nearly $200 million in cash, no debt, and what Broadwood describes as "a clear path to growth and profit margin expansion."

This article is based on a press release statement from Broadwood Partners.

In other recent news, Alcon Inc. has faced multiple analyst adjustments following its latest earnings report and guidance updates. Bernstein SocGen Group reduced its price target for Alcon to $104.65, citing a disappointing second quarter and a guidance downgrade. Similarly, JPMorgan downgraded Alcon from Overweight to Neutral, with a significant price target cut to CHF62.80, highlighting concerns over the company’s future growth expectations. Deutsche Bank also lowered its price target to CHF69.00, maintaining a Hold rating due to limited visibility into market conditions.

BofA Securities adjusted its price target to $100 after Alcon’s profit warning, which was prompted by a decline in surgical procedure volume and increased competition. Wells Fargo followed suit, reducing its target to $88.00 after Alcon revised its fiscal year 2025 revenue guidance, projecting 4-5% growth instead of the previously expected 6-7%. These developments reflect a cautious stance from analysts amid Alcon’s recent performance and market challenges.

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