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Independent Alcon committee rejects Novartis' merger proposal
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HUENENBERG, Switzerland — An independent committee of Alcon's board of directors has formally rejected Novartis' merger proposal, Alcon announced in a press release.
On Jan. 4, Novartis announced a proposal to acquire the minority publicly traded shares of Alcon. In response, the Alcon committee expressed disappointment with Novartis' takeover bid.
In a letter to Daniel Vasella, MD, chairman and CEO of Novartis and member of the Alcon board, committee chairman Thomas G. Plaskett termed the price and other terms of the Novartis proposal "grossly inadequate" and based on "fundamentally flawed" financial analysis, according to the release.
"The Committee believes, based on the advice of its independent financial advisor, Greenhill & Co., that the fundamental value of Alcon on a standalone basis significantly exceeds the price that Novartis has offered," Mr. Plaskett said in the letter. "The Committee believes that Alcon's 'unaffected share price' is significantly greater than the US$137 share price asserted by Novartis and that the analysis that Novartis employs to support such an assertion is fundamentally flawed."
The committee said Novartis' "coercive tactics" are "offensive and demonstrate a profound disrespect for Alcon's minority shareholders, many of whom are employees who, for more than 60 years, created the value in Alcon," according to the release.
"The Novartis proposal would inequitably and unfairly distribute that value to its two largest shareholders, which is neither befitting a company of Novartis' stature nor equitable to the Alcon shareholders, many of whom have been long-term investors since the initial public offering in 2002. The Committee notes that Alcon employees are one of the largest minority shareholders," the release said.