- Staar Surgical terminated Alcon’s $1.6B takeover after failing to win the required shareholder approval, with support stuck near 30%.
- Broadwood Partners, which owns about 30% of Staar, led opposition citing undervaluation and a flawed sale process, with proxy advisors also recommending against the deal.
- Alcon’s sweetened $30.75-per-share offer and other concessions did not overcome governance, transparency, and compensation concerns.
- With the deal off, Staar shares fell over 12% and investors now look for a credible standalone plan amid China revenue weakness and potential board pressure.
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The collapse of the Alcon takeover bid marks a decisive moment in what had been a months-long proxy battle, exposing critical tensions in valuation, process, and strategic vision.
Deal Structure vs. Shareholder Expectations
Originally proposed in August 2025 at $28 per share (≈ $1.5 billion), Alcon increased its offer to $30.75 per share (≈ $1.6 billion) after mounting opposition. However, this 74% premium over the 90-day VWAP failed to satisfy Broadwood Partners, which owns ~30.2% of Staar shares, and other activist stakeholders. These investors held firm in their belief that Staar’s standalone growth prospects—especially in the refractive surgery/IOL market—and the long-term potential of its EVO ICL line justified a materially higher valuation.
Governance and Process Concerns
Criticism centered on several process issues: the board’s due diligence, timing (deal initiated as China revenue was collapsing), executive compensation (“golden parachute” payouts), and alleged conflicts of interest—e.g., Staar’s chair, Elizabeth Yeu, had a consulting relationship with Alcon as recently as late 2024. Proxy advisory groups—ISS, Glass Lewis, and Egan-Jones—unanimously recommended against the deal even after amendments, indicating widespread belief of flaws that could not be remedied simply by tweaking the offer.
Strategic Implications for Staar
Operating standalone, Staar must now deliver growth amid past challenges. China has been a major drag: revenue collapsed by ~99% in Q1 and inventory issues have disrupted distributor demand. Analyst downside scenarios suggest STAA shares may hover closer to $15-$18 if market pessimism prevails. Strong investor pressure not just to reject the deal but to demand changes at the board level—Broadwood has called for removal of three directors—signals that governance reform may be essential.
Opportunities in Independence
Despite the failed deal, Staar retains several assets: its proprietary EVO ICL technology, a leading safety profile in the phakic IOL field, and growing global myopia demand. With $176 million in cash (as of Q3 2025), it has financial flexibility to invest in operations, expand reach, and possibly explore other strategic alternatives if shareholder or activist-led pressure changes the board’s approach.
Open Questions
- What is the shareholder sentiment regarding major governance changes—will Broadwood push ahead with its proposed board removals, and will it gain sufficient support?
- Can Staar sustainably recover revenue in China, restore stakeholder confidence, and accelerate adoption of EVO ICL globally without partner support?
- Will any rival acquirer surface now that the deal is off, or will Alcon possibly revisit with a higher bid in the future?
- How will Staar’s valuation evolve, especially if the market treats $30.75 as a strike price rather than a floor?
- What cost and operational discipline must management deliver to offset investor concerns over risks in regulatory, competitive, and macroeconomic landscapes?
Supporting Notes
- Alcon raised its initial $1.5 billion ($28/share) takeover bid to $1.6 billion ($30.75/share) after facing resistance from key shareholders, including Broadwood Partners.
- Broadwood Partners holds approximately 30.2% of STAAR’s shares and was the primary force opposing the deal, arguing undervaluation and flawed process.
- Shareholder approval never passed the required majority; support stalled at around 30% in the final vote. Approximately 72% of shares had opposed earlier versions of the deal.
- Proxy advisors ISS, Glass Lewis, and Egan-Jones recommended against the acquisition, even after amendments to address concerns.
- Board dissent was revealed ahead of the amended deal vote; one director abstained in approving the amended deal terms.
- Staar’s revenue in China suffered a severe drop (~99%), due to distributor inventory overhang and weaker demand, creating headwinds for standalone operations.
- Estimated cash position was approximately $176 million as of Q3 2025; no termination fee will be paid by either party after deal cancellation.
- Following the announcement, STAAR shares dropped sharply—over 12% intraday—reflecting investor concern over the fallout.