Why STAAR Surgical Shareholders Should Vote Against the Alcon Takeover

The proposed $30.75-per-share takeover of STAAR Surgical by Alcon has sparked a fierce battle between the company's board and its largest shareholders. While the board defends the deal as a "value-maximizing" transaction, a closer examination of corporate governance flaws and valuation misalignment reveals compelling reasons for shareholders to reject the offer.

Corporate Governance: A Flawed Process

The Alcon merger was approved after a process criticized as rushed and opaque. Broadwood Partners accused the board of failing to conduct "meaningful market checks" and limiting the time for alternative bidders to submit proposals. This critique is echoed by independent proxy advisory firms: ISS, Glass Lewis, and Egan-Jones all questioned the board's credibility, with the latter two recommending shareholders vote against the deal.

The board's defense-that the 59% premium over the 90-day volume-weighted average price justifies the transaction-ignores procedural flaws. For instance, the go-shop period concluded without any superior offers emerging. However, Broadwood and analysts like Mizuho argue that the 30-day window was insufficient to attract serious bidders, particularly given STAAR's complex regulatory environment and global supply chain challenges.

Valuation Misalignment: A Question of Fairness

The $30.75 offer price, while a 74% premium to STAAR's August 2025 90-day average, fails to reflect the company's intrinsic value. Independent analyses reveal a wide range of estimates. Alpha Spread calculates STAAR's intrinsic value at $16.08 per share under a base-case scenario, suggesting the stock is overvalued by 35% at the current price. Conversely, a DCF analysis by Simply Wall St estimates intrinsic value at $37.33, implying the stock is undervalued by 32%.

This divergence highlights the uncertainty surrounding STAAR's future. While the company reported 6.9% year-over-year revenue growth in Q3 2025, its performance in China-a key market-remains a drag. Q1 2025 results showed a 45% decline in China sales due to inventory management issues. Despite these challenges, industry analysts project 13.2% annual revenue growth for 2026, aligning with the broader medical equipment sector's 13.5% growth rate. A $30.75 offer, therefore, may undervalue STAAR's long-term potential.

The Cost of Complacency

The board's insistence that the merger is in shareholders' best interest overlooks its own governance failures. By rushing the process and dismissing dissenting voices, the board risks eroding trust. As ISS noted, the board's messaging about downside risks "lacks credibility," undermining its authority to make such a critical decision. Furthermore, the lack of transparency in financial projections-such as how Alcon's offer aligns with STAAR's long-term strategic goals-leaves shareholders in the dark.

Conclusion

The Alcon takeover, while offering a short-term premium, is built on a foundation of procedural flaws and valuation uncertainty. Shareholders who prioritize long-term value and robust governance should reject the deal. The board's failure to address governance concerns and the mixed signals from valuation analyses suggest that STAAR's intrinsic value remains unexplored. Voting against the merger is not merely a rejection of Alcon's offer-it is a demand for accountability and a fairer process.