Global buyout firm Warburg Pincus is facing competition from Advanced Medical Optics, an eye care company, in its $4.8 billion (€3.33 billion) bid to take AMO’s rival Bausch and Lomb private.
Financial details of the Advanced Medical Optics bid were not disclosed. The company said in a statement: “We believe that the current transaction with Warburg Pincus undervalues Bausch and Lomb.”
Bausch shares rose 5 percent on news of the rival bid to $70.21 giving the company a $3.82 billion (€2.84 million) market capitalisation.
NYSE-listed Advanced Medical Optics shares fell 3.2 percent to $41.10. It has a quarter of the employees and half the sales of Bausch and Lomb but Advanced Medical Optics said in a statement: “We believe it is only logical to explore this opportunity given the highly complimentary nature of our two businesses.”
An expansion in the eye care market and the elimination of a 154-year-old rival brand are attractions for Advanced Medical Optics according to news agency Bloomberg.
Bausch’s market share dropped by 10 percent and lens care sales were down 21 percent in 2006 partly due to recalls of its flagship contact lens solution ReNu and consequent lawsuits.
Costly disruptions and accounting irregularities have delayed the release of Bausch and Lomb’s financial filings. Ownership by Warburg Pincus would enable the company to tackle its problems away from public scrutiny.
Warburg will receive $40 million if Bausch and Lomb break their previous agreement reached 16 May.