Alcon rejects raised bid for STAAR Surgical as shareholders revolt

Investing.com -- STAAR Surgical Company (NASDAQ:STAA) privately asked Alcon AG (NYSE:ALC) to sweeten its $28-per-share takeover offer, but Alcon rejected the request, according to supplemental proxy materials filed late Thursday.

The filing marks the first time STAAR has acknowledged that the deal may fail if it is not amended, stating that “the likelihood of [a failed shareholder vote] is increased if there is no amendment or modification to the existing terms of the Merger Agreement.”

The disclosure follows Investing.com’s earlier reporting that roughly 72% of outstanding shares had already voted against the merger ahead of the original October 23 meeting, suggesting the transaction was on track to be blocked.

In a new development, a source familiar told Investing.com that little over 18% of STAAR shareholders voted for the merger ahead of an October 23 shareholder meeting, while only around 8% voted for the deal’s controversial compensation package.

According to the new disclosures, STAAR’s board met repeatedly between October 15 and October 24, debating potential amendments to the merger, including a possible price increase or a new 45-day “go-shop” period that would allow the company to solicit other bids.

On the morning of October 23, hours before the now-postponed shareholder vote, CEO Stephen Farrell informed the board that Alcon had “rejected STAAR’s request that Alcon agree to an increase in the Merger Consideration.” STAAR’s directors subsequently agreed to adjourn the meeting, citing a need for more time to negotiate.

Alcon later proposed a go-shop period that would remove its matching rights and termination fee, but STAAR’s board refused to amend the merger agreement without a concurrent price bump. The board also reset the record date for voting to October 24 and pushed the special meeting back to December 3 to “allow ongoing discussions.”

Broadwood Partners, STAAR’s largest shareholder with a 27.5% stake, and Yunqi Capital, which owns about 5.1%, remain publicly opposed to the deal. All three leading proxy advisory firms, ISS, Glass Lewis, and Egan-Jones, have also urged investors to vote against it.

Yunqi further criticized STAAR on Friday, sending a letter to the company’s Board calling for the merger’s termination amid the special meeting’s postponement. The Hong Kong-based investment manager emphasized that "shareholders have already decided the vote," and that STAAR’s discussions with Alcon have offered, "no indication of actual progress in the way of improved terms."

"We respectfully request that the Board allow the proposed transaction with Alcon to be terminated in accordance with the direction already expressed by shareholders, and that STAAR move forward on a path to realize the significant value we believe the Company is capable of achieving," the firm’s CIO, Christopher Wang, concluded in the letter.

STAAR shares rose as much as 6% earlier in the week amid speculation that Alcon could return with a higher bid. The rally followed analyst commentary suggesting ongoing negotiations between the two sides. The stock has since pared gains, down about 2.1% in afternoon trading Friday, leading to a loss of 1.1% on the week.

In an October 27 note, Piper Sandler analyst Adam Maeder wrote that the delayed shareholder vote “suggests to us that the two parties may be discussing the potential to amend deal terms, including the offer price.” He added that Alcon’s current $28-per-share offer implies roughly 4x 2026 consensus revenue for STAAR — “a reasonable multiple for an asset that is expected to grow at a +10% CAGR from 2026-2030, according to the proxy.” Maeder said he does not expect Alcon “to come back with a materially higher bid,” though he acknowledged that “there has been significant shareholder opposition to the current proposal” and uncertainty remains over what price would satisfy investors.

If STAAR and Alcon cannot agree to revised terms, the high-profile sale may collapse entirely when shareholders reconvene in December.

Both STAAR Surgical and Broadwood Partners declined to comment on the matter.