Novartis’ efforts to close its acquisition of Alcon looks set to drag on after the eyecare specialist brought in a legal expert who says no deal can be pushed through if the committee representing minority shareholders continues to reject the Swiss major’s offer.

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 at the begininig of the year announced plans to buy out the 23% stake held by minority shareholders for much less, $153 per share,a figure that has since gone down. The latter offer caused uproar and Alcon’s independent director committee immediately opposed the deal.

The Basel-headquartered firm has shown no signs of upping its offer and believes that legally it will be able to push through the acquisition once it takes majority control from Nestle later this summer. However the IDC commissioned Hans Caspar von der Crone, “a leading Swiss legal and corporate governance expert” who says “the Alcon board will not be able to validly decide on Novartis' merger proposal without the IDC's prior recommendation”.

Getting the IDC on-board is “an indispensable first step” to a takeover taking place, Prof von der Crone states. He adds that “a merger agreement signed on the basis of the decision of a conflicted board will not be legally effective if the counterparty to the agreement was aware of the conflict of interests at the board level”.

Thomas Plaskett, chairman of the IDC, said that since the beginning of the process, the committee has asserted that “all roads lead to the independent directors”. He added that “while we continue to hope that we can reach a negotiated deal, Professor von der Crone's legal opinion makes clear that, regardless of Novartis' ultimate course of action, the IDC's recommendation is a mandatory step prior to the consummation of Novartis' merger proposal”.

Mr Plaskett went on to say “any action that Novartis might take for the purpose of circumventing the minority protections embodied in the current IDC would result in the same conflict of interests as taking the prohibited actions directly”. The committee also claimed that the value of Novartis' proposal, which was deemed “grossly inadequate” by the IDC and its advisors, “has steadily deteriorated” and as of June 25, was worth $136.78 per Alcon share.

Analysts believe Novartis will need to either increase its bid to the minority shareholders or decide not to pursue a full merger. The company has yet to make any comment on the legal arguments put forward by the IDC.