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Eyecare rival tops bidder for Bausch

July 06, 2007|Daniel Yi | Times Staff Writer

Santa Ana-based Advanced Medical Optics Inc. offered more than $4 billion Thursday for larger rival Bausch & Lomb Inc., topping a previous bid from private equity firm Warburg Pincus.

Bausch & Lomb's annual revenue of $2.3 billion is more than double that of Advanced Medical Optics, which has been on an aggressive buying spree to expand its reach.

"This is a truly unique opportunity that would enable AMO to accelerate our strategic goal of providing a full range of advanced technologies," said Jim Mazzo, chairman and chief executive of Advanced Medical, which makes eye surgery devices and lens solutions.

In May, Rochester, N.Y.-based Bausch & Lomb accepted an offer of $65 a share from Warburg Pincus, but it had 50 days to consider other bids. The deadline was Thursday.

Warburg Pincus, which has the option to make a counteroffer, declined to comment.

Bausch & Lomb said its board had "determined that the [Advanced Medical Optics' offer] is bona fide and is reasonably likely to result in a superior proposal."

Recent acquisitions have made Advanced Medical one of the world's largest providers of corrective eye surgery equipment and technology. In April the company, which was spun off from Irvine-based Allergan Inc. in 2002, purchased IntraLase Corp. of Irvine for $808 million in cash. In January it bought WaveFront Sciences Inc. of Albuquerque for $20 million.

But Advanced Medical has been hit by product recalls that have damaged its image with consumers and investors.

In May it was forced to recall all of its bestselling Complete MoisturePlus contact lens solution, a product that accounted for about one-tenth of its gross revenue last year, because of possible links to a serious eye infection. Last year the company recalled 183,000 units of MoisturePlus after bacterial contamination was traced to a Chinese manufacturing plant.

Its shares, which traded at more than $50 a year ago, closed Thursday at $35.89, up 42 cents. But trading was halted about an hour before the close at the New York Stock Exchange after news reports of the impending offer for Bausch & Lomb.

Bausch & Lomb's shares shot up $3.36 to $72 before its trading was halted as well.

Under the deal, which must be approved by government regulators and shareholders of both companies, Advanced Medical would pay $45 in cash and $30 in stock for each outstanding share of Bausch & Lomb, valuing the larger company at about $4.3 billion.


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