Bausch & Lomb has extended until May 12 the deadline for acceptance of a hostile tender offer of $34 a share for Wesley Jessen, which values the US supplier of colored contact lenses at $666 million. Wesley Jessen's board firmly rejected B&L's offer on March 30. On Apr. 24, it announced that it had started preliminary discussions with a ?third party,? believed to be a so-called ?white knight,? with the consent of Ocular Sciences (OSI).
B&L made its bid in March after Wesley Jessen and OSI, another innovative US supplier of contact lenses with facilities also in the UK, announced their decision to merge. B&L has made it clear that it's not interested in OSI, but only in Wesley Jessen. On Apr. 10, Wesley Jessen said its management was seeking exploratory discussions with B&L aimed at obtaining a ?superior proposal? that would be compared with the benefits of a strategic business combination with OSI.
In rejecting B&L's $34 cash bid, Wesley Jessen pointed out that its own stock traded at $40 three months ago, that many analysts were projecting a valuation of $40-45 a share, and that the merger with OSI could raise the company's earnings by 30 percent. It recently indicated that its own results for the 1st quarter ended Apr. 1 will show higher-than-anticipated earnings of 43-44 cents a share on a sales increase of about 7 percent to more than $81 million.
For its part, OSI reports net income of $7.1 million in the 1st quarter ended March 31, as compared to $6.7 million a year ago, on 17.4 percent higher sales of $43.3 million. OSI has filed a lawsuit in California State Court against B&L, seeking injunctive relief and damages for its alleged ?tortious interference? with its own planned merger with Wesley Jessen.
B&L's net earnings grew to $39.1 million in the 1st quarter ended March 25 from $22.4 million a year ago. Excluding the positive impact this year of a $15.2 million patent litigation settlement with Alcon Laboratories and $7.4 million in losses last year from discontinued operations, such as Ray-Ban, net earnings grew by 62 percent to $23.9 million in the quarter.
Revenues from continuing operations rose by 4 percent to $406.9 million, but they would have increased by 6 percent in constant currencies. US sales rose by 2 percent, representing 52 percent of total turnover. Outside the USA, they were up 7 percent, or by 11 percent in constant dollars. Vision care sales were flat. Revenues from contact lenses increased by 8 percent, with planned replacement and disposable lenses showing double-digit growth. Revenues from lens care and vision accessories declined by 6 percent, due to inventory cutbacks by US and European retailers. Pharmaceutical sales improved by 4 percent. B&L's laser surgery segment showed a 14 percent sales increase, with an 18 percent gain in constant currencies.