M & A Law Prof Blog

Editor: Brian JM Quinn
Boston College Law School

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Wednesday, April 25, 2007

Bausch & Lomb's 1000 Yard Stare

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.         

http://lawprofessors.typepad.com/mergers/2007/04/bausch_lomb_and.html

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