Investing.com -- The civil war over STAAR Surgical Company (NASDAQ:STAA) raged Wednesday as the lens maker’s largest shareholder, Broadwood Partners, announced it sees a path to a $50-per-share valuation for the company, nearly double the current market price, just two days before a pivotal shareholder vote on a $1.6 billion buyout from Alcon AG (NYSE:ALC).
In a series of competing open letters, the tug-of-war between STAAR’s board and its largest shareholder reached a fever pitch, with both sides working to convince investors ahead of Friday’s vote. The market remains skeptical of a deal closure, with STAAR shares closing Wednesday at $25.89/share, 4.4% higher than Tuesday’s close, but still a fairly large merger arbitrage spread that signals investors expect the $30.75-per-share offer may still be rejected on December 19, despite Alcon sweetening the deal by $2.75-per-share on December 9.
The $50 Independent Path vs. The $30.75 "Certainty"
Broadwood Partners, which holds 30.2% of STAAR, issued a letter to the board Wednesday afternoon pledging cooperation and support if the Alcon deal fails. Most notably, Broadwood founder Neal Bradsher claimed his financial models show a "clear path to a $50 per share stock price next year," even without a full recovery in the global refractive market, the shakiness of which has sent STAAR shares down continually over the past 5 years.
Regardless, Bradsher said, the global refractive market is set to rebound, described as "a matter of when, not if."
Broadwood’s bull case rests on the "longstanding trend" of the market shifting from laser surgery to lens-based solutions. Bradsher cited:
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EVO ICL V5 Launch: The next-generation product line set for January 2026, which another dissident shareholder, 5.1% holder Yunqi Capital, previously estimated could drive significant sales due to higher price points.
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Asian Market Recovery: Indications that inventories in China are finally normalizing, aligning with Yunqi’s perspective. Bradsher noted that industry sources across Asia, Europe, and the Western Hemisphere have confirmed a bright outlook that is currently being masked by a "low" valuation.
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Historical Precedent: The fact that STAAR shares traded as high as $160 just a few years ago when the business was smaller.
- Management Pipeline: Broadwood claimed that "prominent" ophthalmology executives have already reached out expressing interest in leading an independent STAAR, providing the firm with business plans to improve the company’s success "quickly."
Earlier in the day, STAAR’s board had issued its own urgent plea, reiterating its framing of the choice as one between "certain, premium" cash or bearing the "downside risk" of an independent future influenced by Broadwood’s "uninformed views."
China Headwinds
A central pillar of the board’s argument, one that potentially swayed Institutional Shareholder Services (ISS) to flip its recommendation to “FOR” the deal on Monday, is STAAR’s "overweight exposure" to a volatile Chinese market.
STAAR management has been vocal about the "significant, sustained challenges" in the region, noting that China procedure volumes softened during 2025’s second quarter, and did not improve in its third. The company also previously revealed it has not seen the typical seasonal rebound in the fourth quarter.
ISS appeared to align with this pessimistic outlook, noting that "uncertainties about valuation are now outweighed by the combination of more acute downside risks." The advisory firm suggested that the $30.75 cash premium is a necessary hedge against these operational headwinds, especially given that "shareholders cannot rely on the incumbent leadership team" to navigate them alone.
The board also used its morning release to "set the record straight" on Broadwood’s arguments regarding ignorant treatment of other suitors during the sale process and a subsequent “go-shop” period, amended into the deal in November. Management provided a detailed breakdown of potential buyers that Broadwood has cited:
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Parties A & B: Identified in proxy materials as a private equity firm with interests in China and a healthcare investment platform. STAAR claims these parties reached out just two days before the Alcon deal but provided no valuation or financing terms. Despite an invitation to submit proposals within 24 hours, neither engaged, and both allegedly confirmed during the go-shop period that they were not interested.
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Party C: A privately-owned company that, after contacting board members regarding a potential business combination, later confirmed its outreach was merely an "introductory email" and not a proposal.
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FountainVest: STAAR believes this is a "credible buyer" cited by Broadwood in its argumentation regarding the inadequacies of the go-shop process. The board noted FountainVest waited until Day 21 of the 30-day go-shop to reach out and ultimately declined to sign a non-disclosure agreement (NDA) even after a standstill provision was removed.
Another Shareholder Against
Despite management’s efforts, the amount of resisting shareholders continued to widen. Defender Capital, a 1.5% shareholder for over a decade, reiterated its intention to vote "AGAINST" on Wednesday, despite the raised deal price. Defender argued the deal is "extremely opportunistic" for Alcon, signed at a "wrong time and wrong price" just as business fundamentals began to stabilize.
Those “FOR” and “AGAINST” seem now set:
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For the Deal: The STAAR Board and proxy advisor ISS, which recommends the deal to "mitigate acute downside risk" despite a "deeply flawed" process.
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Against the Deal: Broadwood (30.2%), Yunqi Capital (5.1%), and Defender Capital (1.5%), as well as proxy advisors Glass Lewis and Egan-Jones.
With over 36% of the shareholder base now publicly aligned against the merger, the outcome of Friday’s meeting remains a high-stakes toss-up.
