Bausch & Lomb likely to reject AMO takeover bid

In a letter issued Tuesday, Bausch & Lomb said it will likely reject Advanced Medical Optics' $75 per share takeover bid unless AMO can provide "credible evidence" that its shareholders will approve the deal.

Senior members of ValueAct Capital, an investment firm owning 14.7% of AMO, voiced strong opposition to the takeover earlier this month.

Responding to Bausch & Lomb's letter, AMO said, "We continue to believe in the strategic and financial rationale for this combination and are confident in our ability to consummate the transaction. We reaffirm our $75 per share offer, which we believe fully and fairly values B&L."

AMO's board will meet Thursday to review the situation. Bausch & Lomb has requested a response by 12:00 p.m. Friday, according to the letter.

"We are evaluating B&L's letter and will respond to it in due course," AMO said.

In recent weeks, Bausch & Lomb has been weighing AMO's cash/stock bid against the $65 all-cash bid it has already accepted from private equity firm Warburg Pincus in mid-May.

Bausch & Lomb was hours away from completing a 50-day "go shop" period for courting offers superior to Warburg Pincus' when AMO issued its bid on July 5. AMO was then designated an "excluded party," meaning it could continue negotiating with Bausch & Lomb despite the end of the "go-shop" period.

AMO is the only "excluded party" that has been named, according to Bausch & Lomb, which plans to revoke AMO's status unless AMO can provided evidence of shareholder approval.

Bausch & Lomb declined further comment. AMO could not be reached for comment as of press time.