Defender Capital Reiterates Intention to Vote AGAINST STAAR Surgical's Proposed Sale to Alcon Inc.
Rhea-AI Summary
Defender Capital (long‑term STAAR shareholder, ~1.5% stake) reiterated it will vote AGAINST STAAR Surgical's proposed sale to Alcon (NYSE: ALC) and criticized the board's pursuit of the transaction. Defender called the timing and price “wrong,” noted stabilization in Q2 results, cited Broadwood Partners' engagement, and highlighted governance concerns after the company delayed the shareholder vote to December 19 and reopened bidding.
Positive
- Defender owns ~1.5% of STAAR common stock
- Broadwood Partners pledged constructive engagement after the vote
- Q2 stabilization cited as potential upside for STAAR shareholders
Negative
- Defender will vote AGAINST the Alcon acquisition
- Board delayed vote to Dec 19 and reopened bidding
- Governance concerns raised by ISS and Glass Lewis criticisms
- 50% of STAAR business is in China, complicating diligence
News Market Reaction – STAA
In the Dec 18 session, STAA declined 7.22%, reflecting a notable negative market reaction. Argus tracked a trough of -8.7% from its starting point during tracking. Our momentum scanner triggered 27 alerts that day, indicating elevated trading interest and price volatility.
Data tracked by StockTitan Argus on the day of publication.
AI-generated analysis. How Rhea-AI works. Not financial advice.
Expresses Disappointment in the Board's and Management's Continued Pursuit of Ill-advised Deal
As shareholders of STAAR Surgical for the past decade, we remain convicted in the long-term potential of the Company and are disappointed that the Board has continued to pursue the ill-advised sale to Alcon, which we do not believe is in the best interests of STAAR shareholders and does not represent adequate value for the Company. Specifically:
It's the wrong time and wrong price for STAAR shareholders:
For the past decade, STAAR has been making significant inroads globally. With increased screen usage's impact on vision and longer life expectancy, more people are in need of STAAR's differentiated products, leading us to believe the future is bright. Obviously, Alcon agrees, pursuing STAAR at a time when their Chinese business has been weak. Further, STAAR's board signed the Alcon deal right before second quarter earnings, which revealed stabilization in the business, representing potential upside for shareholders. We believe that major STAAR shareholder Broadwood Partners' December 17 press release pledging to constructively engage with the Board after the vote supports continued stability of the business and aligns with our conviction in STAAR's long-term value as an independent entity. Given these factors, this transaction has been proposed at the wrong time and at the wrong price for STAAR shareholders. In fact, we would argue that it is extremely opportunistic for Alcon shareholders to the detriment to STAAR shareholders.
The process leading to the deal was flawed:
Glass Lewis recommended shareholders vote against the deal, while ISS called the process deeply flawed. When deals are announced, event-driven hedge funds will sometimes buy the stock of the company to be acquired and make a little money when and if the deal closes. An all-cash deal by a major healthcare company looked attractive, we suppose, and apparently, some of them purchased shares without realizing that STAAR's largest shareholder for decades, Broadwood Partners, might not support the deal. When they and the second largest shareholder came out against the deal, the stock price traded lower, and we received calls from multiple concerned event-driven funds.
When it became clear that the Company did not have the vote, rather than let the Company's owners, its shareholders, determine the future of the business and accept defeat, STAAR delayed the vote until December 19 and reopened the bidding process. Given that
We continue to intend to vote AGAINST the transaction on December 19:
We continue to see no compelling reason to sell STAAR at this time. The future is always uncertain, however what is certain to us is that this process was flawed and the pattern laid out above leaves us with more questions than answers. We are disappointed that the Board has pursued this ill-advised transaction at a valuation that does not reflect the potential prospects of STAAR's business in the future, and intend to vote AGAINST the deal later this week.
About Defender Capital
Defender Capital, an SEC-Registered Investment Advisor, manages investment accounts – retirement accounts, non-retirement accounts, trusts, corporate accounts, donor-advised funds, etc. – for individuals, families, and corporations. We take a research driven, long-term approach, investing in
Media Contact:
ASC Advisors
Taylor Ingraham (203 992 1230)
tingraham@ascadvisors.com
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SOURCE Defender Capital