ROCHESTER, N.Y. (AP) – With a bidding war behind it, Bausch & Lomb Inc. asked shareholders Friday to vote next month on a $3.67 billion buyout that guarantees its chief executive an options payday of around $30 million.
In a regulatory filing, the 154-year-old eye care company scheduled a special meeting of shareholders on Sept. 21 to vote on the all-cash takeover offer by private equity firm Warburg Pincus.
The company's board, which agreed to the buyout in mid-May, “unanimously recommends” that shareholders back the deal, Chief Executive Ronald Zarrella said in a preliminary proxy statement filed with the Securities and Exchange Commission.
On Wednesday, Advanced Medical Optics Inc. withdrew a $4.2 billion unsolicited counter bid, saying Bausch & Lomb had put up unrealistic hurdles to a potential deal.
Advanced Medical, based in Santa Ana, Calif., had offered $45 in cash and $30 in stock on July 5, the final day of a 50-day period set aside for other buyers to make a better bid.
After some of Advanced Medical's major shareholders came out against the takeover move, Bausch & Lomb asked the California company to provide “concrete, credible evidence” this week of its ability to win over shareholders. Mazzo asked for more time and, when Bausch & Lomb demurred, he reeled in his offer.
Zarrella, who took the helm at Bausch & Lomb in 2001, holds options for 1.1 million shares, most of them with strike prices ranging from $29.84 to $37.68. If shareholders support Warburg Pincus' buyout, he will earn around $30 million, regulatory filings show.
Under the deal, Zarrella is entitled to an extra $10.1 million payout if his job is terminated “without cause,” according to Friday's preliminary proxy.
Bausch & Lomb, which makes contact lenses, ophthalmic drugs and vision-correction surgical instruments, posted $2.3 billion in sales last year and employs 13,000. Advanced Medical recorded $998 million in sales in 2006 and had 3,300 employees.