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Wesley rebuffs hostile bid
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May 19, 2000: 3:49 p.m. ET
Contact lens maker urges shareholders reject $625M Bausch & Lomb offer
By Staff Writer Tom Johnson
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NEW YORK (CNNfn) - Wesley Jessen Vision Care Inc., the world's No. 1 manufacturer of specialty soft contact lenses, urged shareholders Friday not to support a revised hostile takeover bid from Bausch & Lomb Inc., saying its board needs more time to negotiate with other potential suitors.
The Des Plaines, Ill.-based company encouraged shareholders not to tender their shares in support of Bausch & Lomb's offer of $35.55 cash for each outstanding Wesley Jessen share, valuing the company at $625.6 million.
The offer, which Bausch & Lomb termed its "best and final" proposal last week, set a May 31, 2000, deadline for a majority of Wesley Jessen shareholders to tender their shares in support of the deal. The proposal was slightly higher than the Rochester, N.Y.-based company's previous $598 million bid, which offered $34 per share in cash.
 But Wesley Jensen since has indicated it is in merger discussions with "other parties" regarding a possible transaction -- hinting a richer deal may be in the works. The company reiterated that point in a letter to shareholders Friday, although a spokesman declined to comment on what the company's timetable is or exactly how many interested bidders there are.
"The unknown right now is who this third party is and what they are going to bid," said Bruce Jacobs, an analyst with Deutsche Bank Alex. Brown. "It's almost impossible to project the outcome here with that unknown."
Bausch & Lomb issued a statement Friday afternoon expressing disappointment in Wesley Jessen's decision, noting it "had hoped that the past month would have provided sufficient time for [the company] to conclude its third party discussions."
In the release, Bausch & Lomb Chairman and CEO William Carpenter also softened his position that the company's current offer is its best and last, saying his company would "evaluate our offer in the context of any competing alternative."
"We continue to make the case to Wesley Jessen shareholders that our offer represents the highest value available for the company," he said, adding Bausch & Lomb would file preliminary proxy materials Friday to place three members on Wesley Jessen's board at its annual meeting, scheduled for June 23.
Wesley Jessen (WJCO: Research, Estimates) shares rose 1-7/8 to 33 in late afternoon trading Friday while Bausch & Lomb (BOL: Research, Estimates) fell 3/4 to 65-3/4.
"Best and final" offer?
Most analysts interviewed Friday said they expect Bausch & Lomb to remain in the bidding for Wesley Jessen because the company dominates the specialty contact market.
"This technology has the potential to be incorporated into virtually every contact lens made," said Andrew Jay, an analyst with First Union Securities. "The value to a company with a clear contact lens business is clear."
Previously, analysts had speculated that health-care titan Johnson & Johnson (JNJ: Research, Estimates), the nation's No. 1 contact lens maker, might make a competing bid for the company, which offers the world's largest line of colored contact lenses.
But analysts Friday indicated J&J is not a likely bidder because Wesley Jessen has indicated a merger with the third party would leave it as the second-largest U.S. producer of contact lenses.
There also was little indication that Ocular Sciences (OCLR: Research, Estimates), which inked a $413 million stock deal to acquire Wesley Jessen in March, still is considered a viable merger candidate. Ocular's stock closed Thursday at 16-3/8, exactly where it closed the day its merger with Wesley Jessen was announced.
Wesley Jessen shares have climbed nearly 33 percent since that deal was signed March 20. 
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