STAAR and Broadwood conflict over proposed Alcon merger continues

The tension between STAAR and Broadwood Partners continues as both have issued further statements for and against the proposed merger between STAAR and Alcon, respectively. These statements come weeks after both had pleaded their case to shareholders following the expiration of the “window shop” period in the proposed merger agreement.

Broadwood, the largest stockholder holding approximately 27.5% of the outstanding common stock of STAAR, has sent an in-depth, 81-page presentation to shareholders to support their case for denying the merger, while STAAR released its own 47-page, in-depth analysis.

In the presentation, Broadwood claims that the short 30-day negotiation period was “driven by Alcon’s desire to reach an agreement before STAAR’s positive Q2 2025 results were released.”^1,2

STAAR, in turn, has stated that Broodwood's claims are "flawed, misleading, and misinformed" and that the deal has been in negotiation with Alcon since 2024, in which STAAR presented "optimistic projections to Alcon to extract the highest possible value."^3,4

Broadwood also notes that it is the wrong time, process, and price to sell STAAR. The group says that STAAR is on an upswing and that the company has been “immune to these near-term headwinds,” referencing demand in the refractive surgery market in China.^1,2

Broadwood states that the process of the sale was one-sided and “rife with material conflicts,“ claiming that in talks with Alcon, STAAR “used management projections that were revised downward at the last minute to cast a more pessimistic outlook on the business and unreasonable discount rate assumptions.” Broadwood also notes concerns that the board’s “numerous business entanglements with Alcon and management’s personal financial interests influenced the timing, process, and decision to sell.”^1,2

STAAR refuted the claims by stating, "Broadwood’s perceived entanglements of former board members who are no longer on the STAAR board and who did not vote on the Alcon merger are irrelevant; none of those individuals were involved in the board’s decision..."^3,4

According to Broadwood, a CEO of a “well-capitalized and leading ophthalmology company” reached out to the STAAR’s CEO and Chair in April 2025 seeking to discuss a strategic transaction but was ignored.^1,2

STAAR refuted the claims by noting that other than Alcon, STAAR has not received any acquisition or merger proposal for more than 10 years. Also stating that "Broadwood has not delivered" on claims that there is another viable buyer and that the company has not received any acquisition proposal other than from Alcon.^3,4

The group goes on to mention that big well-known brands such as PepsiCo, Kimberly-Clark, and Procter & Gamble have been cutting their financial forecasts, “bracing for lower sales and signaling uncertainty about the near future.”

Regarding the timing of the deal, Broadwood states that STAAR has “only just begun to realize benefits of an ‘organizational reset’ that included the appointment of a new CEO, a realigned leadership structure, significant cost reductions, optimized inventory management, a manufacturing expansion, and product innovation.” STAAR’s Q2 2025 financial results exceeded analyst expectations, which Broadwood says is an indication that growth is coming. The group projects that, should the deal be denied, STAAR would go on to make nearly $500 million in 2030. This is nearly double what the company has secured in 2025, according to Broadwood. STAAR on the otherhand projects 10% net sales growth.

Broadwood also calls to attention comments made by STAAR leadership that contradict past statements.^1,2 One example is that prior to the Alcon deal, the company stated, “Better days are ahead as the macroeconomic headwinds appear to be diminishing in China, and we expect a good second half of the year.” However, after the Alcon deal, the company noted that “business is heavily exposed to China, which faces significant economic uncertainty and where sales trends have been declining.”

STAAR responded by saying that Broadwood is taking management’s historical remarks out of context and that management continues to expect that “better days are ahead.” However, the company stressed that "better days ahead" does not mean expected future growth that mirrors the past.

Broadwood notes that the proposed merger consideration reflects a temporary period of weakness for the business and a depressed stock price. Alcon will purchase all outstanding shares of STAAR common stock for $28 per share in cash, according to the terms of the agreement. However, Broadwood claims that STAAR has historically traded at prices well above $30 per share.

STAAR refuted, saying Broadwood’s "artificially low discount rate is not appropriate given STAAR’s risk profile and results in an inflated view of STAAR’s long-term value." STAAR continued saying that Broadwood's evaluations are "stuck in the past" and do not "reflect actual performance today or reasonable expectations going forward," noting that a 10% growth rate is below STAAR's typical 20% growth rate and comes with risk attached.^3,4

Behind Broadwood is Yunqi Capital Limited, owner of 5% of STAAR’s outstanding shares.

Christopher Min Fang Wang, chief investment officer at Yunqi Capital Limited, was quoted in the presentation as saying, “based on our analysis, the proposed sale at the current proposed terms materially undervalues the Company and does not reflect the Company’s intrinsic value and its standalone prospects… We believe STAAR’s superior and proprietary technology, as well as its global scale, position the company to take a significant portion of the fast-growing refractive surgery market, become an even more profitable enterprise, and, ultimately, deliver upon its vision to be the first choice for surgeons and patients seeking visual freedom from glasses and contact lenses. In our view, there is no compelling reason to sell STAAR at this underwhelming price.”

In response to Broadwood, STAAR refuted the claims that the deal was done at the "wrong time, process, and price" in a statement of its own.^3,4

“Broadwood’s presentation recycles flawed, misleading, and misinformed claims about the process and considerations leading up to the Alcon agreement and the certain, compelling, premium cash value it provides. Broadwood’s recycled, flawed, misleading, and misinformed claims have been refuted in detail by actual facts in STAAR’s investor materials, including in the press release and presentation that we published on September 26.”

In addition, STAAR noted its board was aware of the objection by Broadwood prior to approving the Alcon deal and considered the objections but decided to move forward because it "unanimously concluded that the Alcon agreement is in the best interests of STAAR stockholders" and that if the Alcon merger agreement is not approved, it could be a deterrent to any future buyers and that STAAR faces sustained challenges as a standalone company.^3,4

The company also told shareholders that the Alcon transaction provides STAAR stockholders with compelling, certain, premium cash value, noting positives such as “$28 per share in cash, which represents approximately a 59% premium to STAAR’s 90-day Volume Weighted Average Price (VWAP) and a 51% premium to the closing price of STAAR common stock on August 4, 2025.”³

The company also noted that the takeover price represents 6 times the company’s estimated 2025 sales.

STAAR concluded by saying, “As demonstrated by the recent expiration of the HSR waiting period, we continue to make progress toward the closing of the Alcon merger and look forward to completing the transaction so that its benefits can be realized for our stockholders, employees, surgeons, and patients.”

STAAR will hold a virtual Special Meeting of Stockholders on October 23 at 8:30 am (Pacific Time) to vote on the Alcon merger. Should the merger be approved, STAAR anticipates it to close 6-12 months from the initial merger announcement.

References:

1. Broadwood Partners Publishes Presentation Detailing Opposition to STAAR Surgical’s Sale to Alcon. Published October 3, 2025. Accessed October 6, 2025. https://www.businesswire.com/news/home/20251003368294/en/Broadwood-Partners-Publishes-Presentation-Detailing-Opposition-to-STAAR-Surgicals-Sale-to-Alcon

2. Broadwood Partners STAAR Surgical Investor Presentation. Published October 3, 2025. Accessed October 6, 2025. https://letstaarshine.com/wp-content/uploads/2025/10/STAA-Broadwood-Capital-Investor-Presentation-vFINAL.pdf

3. STAAR Surgical: Independent Industry Analysts Recognize Merits of Alcon Merger, the Value It Provides, and the Downside Risks Facing STAAR on Standalone Basis. Published October 6, 2025. Accessed October 6, 2025. https://investors.staar.com/news-and-events/press-releases/2025/10-06-2025-123120517

4. STAAR Surgical Addresses Broadwood Partners’ Flawed, Misleading, and Misinformed Claims. Published October 6, 2025. Accessed October 6, 2025. https://investors.staar.com/news-and-events/press-releases/2025/10-06-2025-123020697

5. Harp MD. STAAR and Broadwood clash over proposed Alcon merger. Published September 26, 2025. Accessed October 6, 2025. https://www.ophthalmologytimes.com/view/staar-and-broadwood-clash-over-proposed-alcon-merger