Broadwood opposes STAAR Surgical acquisition by Alcon

Broadwood Partners, which owns approximately 27.5% of STAAR Surgical Company (NASDAQ: STAA), filed a definitive proxy statement urging shareholders to vote against the proposed acquisition by Alcon Inc. (NYSE: ALC). The investment firm announced its opposition to the $28 per share deal announced August 5.

In a letter to shareholders, Broadwood outlined concerns about the timing and process of the transaction. The firm stated that STAAR's board conducted negotiations with only one party over less than a month without proactive outreach to alternative buyers. Broadwood noted that two other potential acquirers contacted STAAR during the same period but were not provided access to due diligence materials or management until hours before the Alcon agreement was signed.

The investment firm raised questions about potential conflicts of interest, stating that STAAR's board chair had a consulting relationship with Alcon that paid hundreds of thousands of dollars over seven years. Broadwood claimed this relationship was not disclosed to other board members until days before the transaction announcement.

Broadwood compared the current offer unfavorably to a previous proposal, noting that Alcon had offered $62 per share for STAAR less than a year ago. The firm argued that STAAR's business outlook has strengthened since then, despite the stock trading at lower levels before the merger announcement.

The proxy filing revealed that STAAR executives stand to receive approximately $55 million in immediate compensation if the deal closes, with the CEO receiving about $24 million due to accelerated vesting of stock grants.

Another significant shareholder, Yunqi Capital Ltd., which owns 5.1% of outstanding shares, also opposes the transaction according to Broadwood's statement. The special meeting to vote on the acquisition is scheduled for October 23.

Broadwood has been invested in STAAR for over 30 years and described itself as the company's largest shareholder by a significant margin.

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