Advanced Medical Optics Inc. made a cash-and-stock buyout offer Thursday for eye-care products rival Bausch & Lomb Inc., which received a $3.67 billion bid in May from a private equity firm, The Wall Street Journal reported.
Santa Ana, Calif.-based Advanced Medical Optics put in a $75-a-share offer of $45 in cash and $30 in stock for each Bausch & Lomb share, the Journal said in its online edition, citing unidentified people familiar with the matter. That would value the bid at about $4.23 billion.
Neither Bausch & Lomb nor Advanced Medical Optics immediately returned calls seeking comment.
Warburg Pincus, a New York-based buyout and venture capital firm, won an agreement from Bausch & Lomb's board in mid-May to pay $65 a share for the 154-year-old maker of contact lenses, ophthalmic drugs and vision-correction surgical instruments.
Advanced Medical Optics' purported offer came on the final day of a 50-day period that Bausch & Lomb set aside for other buyers to make a better bid.
"I thought $65 was a fair offer and so $75 obviously trumps that," said analyst Jeff Johnson of Robert W. Baird & Co. in Milwaukee.
Under the deal with Warburg Pincus, Bausch & Lomb can solicit superior proposals from third parties until midnight Thursday but would have to pay a $40 million breakup fee if it accepts any other offer.
"The go-shop provision is not over until 11:59 p.m.," Johnson said. "Theoretically, there could be other offers as well, and also Warburg, I'm sure, would have a chance to come back to the table if they'd want to."
In late May, a day after disclosing its interest in Bausch & Lomb, Advanced Medical Optics voluntarily recalled its leading contact lens care product after a federal investigation linked it to a rare eye infection.
The Centers for Disease Control and Prevention said the multipurpose solution, Complete MoisturePlus, seems to be a factor in cases of Acanthamoeba keratitis, a painful eye infection caused by a waterborne organism that, untreated, can lead to permanent vision loss or blindness.
The global recall fueled a sharp sell-off in the company's stock, prompting uncertainty as to whether it would actually made a bid for its bigger rival.
Bausch & Lomb has been struggling to recover from last spring's global recall of a contact lens cleaner blamed for an outbreak of severe eye infections.
Federal regulators called its ReNu with MoistureLoc multipurpose contact lens cleaner, a $100 million-a-year product, the "potential root cause" of a flurry of potentially blinding Fusarium keratitis infections in the United States, Asia and other parts of the world.
Bausch & Lomb posted $2.3 billion in sales last year and employs about 13,000 employees, while Advanced Medical Optics recorded $998 million in sales in 2006 and had 3,300 employees.
Advanced Medical Optics bought Visx Inc., a maker of laser eye surgery devices, in a deal last year valued at about $1.25 billion in cash and stock. In April, it acquired IntraLase Corp. of Irvine, Calif., a vision-correction laser maker. In the lens solution market, it is a No. 3 player behind Alcon Inc. and Bausch & Lomb.
Bausch & Lomb shares rose $3.36, or 4.9 percent, to $72 Thursday. Advanced Medical Optics shares rose 42 cents, or 1.2 percent, to $35.89.
Copyright 2007 AP Features
