Alcon Independent Director Committee says Novartis' offer still grossly inadequate, especially given Alcon's strong earnings

The Independent Director Committee of Switzerland-based ophthalmics group Alcon yesterday reiterated its view that drug major Novartis' merger proposal to minority shareholders is grossly inadequate (The Pharma Letters passim) and applauded Alcon for once again delivering strong earnings results for its first quarter.

Alcon's first-quarter 2010 revenue of $1.7 billion and adjusted earnings per share of $1.91 exceeded Wall Street consensus estimates by 3.6% and 9.1%, respectively. Moreover, Alcon showed strong year-over-year growth in all business segments with Pharmaceutical, Surgical and Consumer revenue increasing 16.3%, 14.7% and 13.9%, respectively, the Committee noted.

Thomas Plaskett, chairman of the Committee, said: 'Alcon's strong earnings, coupled with the continuing deterioration of Novartis' share-based proposal reinforces our view that this already grossly inadequate offer is only getting worse as time goes by. The Committee feels strongly that the value that should be paid to Alcon's minority shareholders must reflect the intrinsic value of Alcon today, plus an appropriate premium for cost and revenue synergies. While the $181 that Novartis is paying Nestle to attain a controlling position in Alcon is relevant, the fact remains that Alcon, thanks to the continuing hard work of its employees, is a superior company that consistently exceeds expectations from a financial perspective and continues to build shareholder value with every passing day.'