The offer that Novartis has made to buy out minority shareholders in Alcon has been described as unfair and flawed by directors of the eyecare specialist.

Novartis is purchasing the 52% stake in Alcon owned by Nestle for $180 per share in cash, which will give it a 77% holding, but plans to buy out the 23% stake held by minority shareholders for much less, $153 per share. Given this scenario, Alcon’s independent director committee has written to Novartis chief executive Daniel Vasella, saying that “the price and other terms proposed by Novartis are grossly inadequate and that the financial analysis upon which [the former’s] unilateral proposal is based is fundamentally flawed”.

The committee goes on to say that “the coercive tactics deployed by Novartis are offensive and demonstrate a profound disrespect for Alcon's minority shareholders, many of whom are employees who, for more than 60 years, created the value” in the Huenenberg, Switzerland-based firm. It adds that the proposal is not “befitting a company of Novartis' stature”.

Thomas Plaskett, chairman of the committee, said “the underlying historical record and management's expected future financial performance of Alcon justify a significantly higher price”. He added that the “financial methodology used by Novartis intentionally ignored Alcon's documented market and operational performance”, including its history of “trading at a premium valuation compared to its peers”.

Mr Plaskett went on to say the committee will “take all appropriate and available steps to ensure that the rights of Alcon's minority shareholders are not trampled on”. He concluded his letter to Dr Vasella by stating “it is important that you understand that the committee's response today is only the first of potentially many steps” it may take in its “obligations to defend Alcon and the minority shareholders”.

Novartis is saying nothing at the moment but analysts believe that a higher offer may be made, one that could be closer to the $168 per share that Novartis has paid Nestle on average in the two tranches, the first taking place in July 2008.