DEFA14A: STAAR Defends Alcon Merger, Rejects Activist Claims

STAAR Surgical refutes activist investor allegations regarding its go-shop process and urges stockholders to accept Alcon's increased all-cash offer of $30.75 per share.

Summary

• STAAR Surgical issued a press release to correct misinformation from activist investors Broadwood Partners and Yunqi Capital regarding its go-shop process for the pending merger with Alcon.
• STAAR alleges Broadwood falsely claimed a credible buyer (FountainVest) was thwarted during the go-shop period.
• FountainVest contacted STAAR on day 21 of the 30-day go-shop period (November 27, 2025) and did not indicate prior interest.
• STAAR's CEO responded the next day, connecting FountainVest with advisors at Citi, who provided a standard draft NDA including a standstill provision.
• FountainVest took 5 days to return a marked-up NDA, deleting the standstill provision, shortly before midnight on day 28.
• STAAR responded within 24 hours (day 29) with a revised NDA accepting the deletion of the standstill, but FountainVest declined to execute it.
• The 30-day go-shop period expired on December 6, 2025, at 11:59 p.m. ET, with no proposals received.
• STAAR questions Broadwood's knowledge of the process and NDA, suggesting potential collaboration with FountainVest to derail the merger.
• CEO Stephen Farrell stated that challenges in growing procedure volumes in China continue, and Q4 softness has persisted from Q2 and Q3.
• STAAR encourages stockholders to accept Alcon's increased all-cash offer of $30.75 per share, representing a 74% premium to the 90-day VWAP and a 66% premium to the closing price on August 4, 2025.
• A virtual Special Meeting of Stockholders is scheduled for December 19, 2025, at 8:30 a.m. PT for voting on the merger.

Sentiment

Score: 4

Explanation: While the merger offers a significant premium, the underlying business performance shows struggles in China and a projected lower growth rate, indicating a defensive sale rather than a growth-driven one. The ongoing dispute with activist investors also adds a layer of uncertainty and negativity.

Positives

• Alcon's increased all-cash offer of $30.75 per share provides a certain and immediate value for stockholders.
• The offer represents a 74% premium to STAAR's 90-day Volume Weighted Average Price (VWAP).
• The offer represents a 66% premium to the closing price of STAAR common stock on August 4, 2025.
• STAAR engaged with 21 third parties during the go-shop process, demonstrating a robust effort to evaluate alternatives.
• Management believes Alcon is the right buyer and that now is the right time to sell the company.

Negatives

• STAAR has struggled to grow procedure volumes in China over the last few years, and these challenges continue.
• Softness experienced in Q2 and Q3 has continued into Q4.
• The company's growth rate is expected to be significantly lower than the 2020-2023 period.
• Activist investors Broadwood Partners and Yunqi Capital are spreading misinformation and attempting to derail the merger.

Risks

• The occurrence of any event, change, or circumstances that could give rise to the termination of the Alcon merger agreement or could cause the consummation of the proposed transaction to be delayed or to fail to occur.
• The failure to obtain approval of the proposed transaction from STAAR's stockholders.
• The failure to obtain certain required regulatory approvals or the failure to satisfy any of the other closing conditions to the completion of the proposed transaction within the expected timeframes or at all.
• Risks related to disruption of management's attention from STAAR's ongoing business operations due to the proposed transaction.
• The effect of the announcement of the proposed transaction on the ability of STAAR to retain and hire key personnel and maintain relationships with its customers, suppliers and others with whom it does business, or on its operating results and business generally.
• The ability of STAAR to meet expectations regarding the timing and completion of the transaction.
• The outcome of any legal proceedings that may be instituted against STAAR related to the proposed transaction.
• The possibility that STAAR's stock price may decline significantly if the proposed transaction is not consummated.

Future Outlook

STAAR expects a significantly lower growth rate than experienced from 2020 to 2023, with continued struggles in China procedure volumes and softness extending into Q4. Management believes the Alcon merger offers certain and immediate value, making it the right time to sell.

Management Comments

• "This is just another example of the misinformation campaign being conducted by Broadwood." Stephen Farrell, CEO of STAAR.
• "This is a pattern, just like Broadwood's inaccurate characterization of STAAR's growth rate and its disconnected perspective of market conditions in China." Stephen Farrell, CEO of STAAR.
• "We continue to have confidence in our ability to grow the business in the long term, albeit at a significantly lower rate than we enjoyed from 2020 to 2023." Stephen Farrell, CEO of STAAR.
• "However, we have struggled the last few years to grow our procedure volumes in China, and those challenges continue to be a hurdle for STAAR." Stephen Farrell, CEO of STAAR.
• "The softness that we experienced in Q2 and Q3 has continued so far in Q4." Stephen Farrell, CEO of STAAR.
• "Now is the right time to sell, and Alcon has proven to be the right buyer." Stephen Farrell, CEO of STAAR.

Industry Context

The filing highlights challenges in the Chinese market for STAAR's vision correction products (ICLs), suggesting potential regional headwinds or increased competition within the ophthalmic surgery sector. The proposed merger with Alcon, a global leader in eye care, indicates consolidation within the industry and a strategic move by STAAR to secure value amidst market difficulties.

Legal Proceedings

• The outcome of any legal proceedings that may be instituted against STAAR related to the proposed transaction is listed as a risk factor.

Stakeholder Impact

• Shareholders are offered a substantial premium ($30.75 per share, 74% premium to 90-day VWAP) for their shares, providing certain and immediate value. They are urged to vote on the merger.
• Employees face a risk of disruption to management's attention and potential impact on the ability to retain and hire key personnel due to the proposed transaction.
• Customers and suppliers face a risk of impact on relationships due to the proposed transaction.

Next Steps

• Stockholders to vote on the Alcon merger agreement at the virtual Special Meeting on December 19, 2025.
• Stockholders are encouraged to contact STAAR's proxy solicitor for voting questions.
• STAAR will continue to file relevant materials with the SEC regarding the proposed transaction.

Key Dates

Recommendation

The company is subject to a definitive merger agreement with Alcon at $30.75 per share, representing a substantial premium over recent trading prices. While the underlying business faces challenges in China and slower growth, the merger offers a clear exit strategy for shareholders at a favorable valuation. The recommendation is to hold shares to capture the merger premium, as the stock price is likely to trade close to the offer price until the transaction closes. There is limited upside for new buyers, and selling before the vote would mean missing out on the premium.

Keywords

STAAR Surgical, Alcon, merger, acquisition, go-shop, proxy statement, activist investors, Broadwood Partners, Yunqi Capital, FountainVest, ICL, phakic IOLs, vision correction, China market, stock premium, shareholder vote, SEC filing