A strong set of financials for Alcon highlights the “grossly inadequate” nature of Novartis’ buy-out proposal, claims 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. The latter offer caused uproar and Alcon’s independent director committee says its fourth quarter results highlight the unfairness of the bid.

Alcon’s sales for the period rose 14.5% to $1.72 billion and net earnings grew 8.0% to $458 million or $1.51 per share. The directors noted that Alcon has now outperformed Wall Street estimates in 27 of the 30 fiscal quarters since its initial public offering, including the last five consecutive quarters.

Thomas Plaskett, chairman of the aforementioned committee, said the results “further cement Alcon's position as a truly unique enterprise and extend a tradition of excellence that goes back 60 years”. He added that “we hope these results inspire Novartis to reconsider their proposal and their attempt to force their offer on Alcon's minority shareholders, many of whom are Alcon employees”.

The committee also claimed that under Swiss law and Alcon's organisational documents, Novartis' merger proposal “will only become legally effective after completing several steps that by their very nature require the cooperation of the members of the committee”. Mr Plaskett added that “ultimately, Novartis cannot implement its merger proposal without the approval of the independent directors”, saying that “while we hope that we can reach a negotiated deal, the substantial legal protections that are in place ensure that...all roads eventually lead to the independent directors”.

Mr Plaskett concluded that Novartis “cannot legally circumvent the committee's powers” but as yet, the Swiss major has shown no signs of upping its offer.