Advanced Medical Optics Inc. said Thursday that it was interested in acquiring Bausch & Lomb Inc. and was willing to pay more than the $3.67-billion proposal the eye-care company accepted from a private equity firm.
Bausch & Lomb agreed last week to be acquired by Warburg Pincus. Bausch & Lomb, however, had the right to solicit other offers during the next 50 days.
"We believe that the current transaction with Warburg Pincus undervalues Bausch & Lomb, and we plan to enter the go-shop process with the intention of exploring a superior offer for the company," Advanced Medical said in a statement.
Santa Ana-based Advanced Medical makes laser vision correction tools, contact lens cleaning solutions and other products. It aims to acquire Rochester, N.Y.-based Bausch & Lomb to fill gaps in its product line -- such as contact lenses and eyeglasses -- and gain greater international exposure in areas such as Latin America and Asia.
Bausch & Lomb declined to comment.
Shares of Bausch & Lomb have traded above Warburg Pincus' offer of $65 a share since the deal was announced. The shares rose $3.76 to $70.21 Thursday.
Advanced Medical Optics shares fell $1.34 to $41.10.
The Warburg Pincus bid had only offered a 5.7% premium to the closing price of Bausch & Lomb shares on May 15, the day before the deal was announced. Leading up to that deal, however, the stock had risen about 25% since mid-March on rumors the company would be acquired.
The success of a rival offer may depend not just on the price tag, but the currency being used since the Warburg Pincus offer is all cash, analysts said.
"It's a surprise [that] someone comes along and offers a higher cash bid. It's going to be hard for the [Bausch & Lomb] board not to recommend it," said Jeff Johnson, an analyst with brokerage Robert W. Baird & Co.