Alcon directors deride Novartis offer as grossly inadequate

The independent director's committee of the world's largest eye care company Alcon today called Swiss pharmaceutical giant Novartis's offer price for acquiring the rest of the company's stock that it does not already own, as ''grossly inadequate.''

Basel-based Novartis, which is seeking a complete direct merger of Alcon into Novartis had offered early this month to buy the remaining 23 per cent of Alcon for $28.1 billion in a second-stage transaction and proposed a merger with full ownership of the stock. (See: Novartis acquires 52 per cent additional stake in Alcon for $28.1 billion)

Earlier in April 2008, the Swiss drug giant had already bought a 52-per cent stake from Nestle, which would raise its holding to 77 per cent in a two-stage transaction. (See: Novartis to acquire Nestle stake in eye care major Alcon for $11 billion)

The committee said in a statement today that after consulting its independent financial advisor, it had determined that the price and other terms proposed by Novartis were grossly inadequate and that the financial analysis upon which Novartis's unilateral proposal was based is fundamentally flawed.

The committee also said that the coercive tactics deployed by Novartis were offensive and demonstrated a profound disrespect for Alcon's minority shareholders, many of whom are employees who, for more than 60 years, created the value in Alcon and are one of the largest minority shareholders.

''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,'' said the committee.