Wednesday, April 25, 2007
Bausch & Lomb finally filed its 2006 10-K today. It is still working on its 10-Qs for the first, second and third quarters of 2006 and the third quarter of 2005 and has made the usual boiler-plate disclosure about there being no assurances of timely completion and filing of these documents.
For M&A purposes, the timing is remarkably coincidental as rumors of a private equity buy-out of the company swirl. Its stock gained almost 13% on Monday on this speculation. On that day, Bausch & Lomb followed standard practice and declined to comment on any takeover speculation. Bausch & Lomb has been buffeted in recent years by the recall and subsequent discontinuation of its ReNu contact lens solution.
It is just beginning to make a come back though the number of ReNu-related lawsuits have been growing. And perhaps management is sensing an opportune time to cash-in/out. If it did so, this would be yet another example of management partnering with flush private equity firms to opportunistically time management buy-outs. The prevalence of this practice in the 1980s led to calls by some to completely ban MBOs. I don't think they should be banned, but more scrutiny by shareholders and independent directors could clearly help. Implementation of a corporate code of conduct for management which, among other things, requires them to inform the board when they do commence active planing for such a buy-out would be a good start. I previously blogged about this need here.