Bausch & Lomb (BOL-NYSE) has received a higher buyout price from Advanced Medical Optics (EYE-NYSE) (or ‘AMO’ hereafter) in a cash and stock merger where Bausch & Lomb’s shareholders would receive $45.00 in cash and roughly $30.00 in AMO stock, valued based on the average closing price of the AMO common stock for five trading days prior to the date a definitive agreement is signed.
The new proposal is subject to termination of Bausch & Lomb’s previously announced merger agreement with Warburg Pincus and the execution of a definitive merger agreement with the company. The terms are subject to include that ‘AMO’ will have up to 12 months to close the transaction and that interest would be paid in cash with respect to the purchase price by ‘AMO’ at the rate of 7.2% per annum beginning six months after a definitive merger agreement is executed. BUT, the proposal is not subject to a financing condition and that may be an important kicker since there was a worry that this was too large of a bite for the company.
We had noted on May 16 Bausch & Lomb Selling Itself Away Too Cheap and then again on May 24 we noted that Bausch & Lomb May Get a Higher Bid.
Ultimately, this may not even be the real and final-final offer either. Warburg Pincus or another group could decide to pony-up the cash, and they might not have to pay the full $75.00 to win. In a cash and stock deal with some antitrust issues (in lens solutions) and with a very long close date, you could always expect a seller to accept terms from someone else. So there is always the chance that a higher bid may be hoped for by holders. Now the main question is at what point there ceases to be any value to a buyer. Is the Beholder’s eye still even looking to beauty?
Jon C. Ogg
July 5, 2007
Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.
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