Broadwood moves to oust STAAR Surgical directors over Alcon deal

Investing.com -- Broadwood Partners, L.P., STAAR Surgical ’s (NASDAQ: STAA) largest shareholder with a 27.5% stake, said Wednesday it intends to call a special meeting to remove several members of the company’s board, continuing its campaign against the proposed $28-per-share sale of STAAR to Alcon AG (NYSE: ALC).

In its Wednesday statement, Broadwood said the move comes “in light of the overwhelming opposition to the proposed acquisition,” warning directors not to delay next week’s scheduled shareholder vote or alter the deal without “substantial input from and alignment with shareholders.”

“It is clear to us that the Board no longer has the confidence of shareholders, and that new directors are needed to properly steward the Company and restore shareholder trust,” said Neal C. Bradsher, Broadwood’s founder and president.

“We anticipate that a refreshed Board would consider, among other matters, how to run a full, fair, independent, and open strategic alternatives process to maximize value that is untainted by the process issues and conflicts of interest that afflicted this proposed transaction with Alcon,” Bradsher added.

The move follows weeks of intensifying pressure on STAAR’s board. All three major proxy advisory firms, ISS, Glass Lewis, and Egan-Jones, have recommended shareholders vote against the merger, citing governance concerns and process flaws. Several key holders, including China-based Yunqi Partners and the U.S.-based Defender Capital, have also joined Broadwood in publicly opposing the deal.

Broadwood has continually critiqued the actions of STAAR’s board, repeatedly citing conflicts of interest, including Chairwoman Dr. Elizabeth Yeu, who engaged in a consulting capacity for Alcon as late as 2024. The hedge fund has also been critical of the board’s lack of engagement and transparency regarding other interested parties, termed A, B, and C in STAAR’s proxy materials.

STAAR, for its part, has repeatedly defended the Alcon sale, emphasizing the “substantial premium and certainty” it provides to shareholders. The company has also pointed to support from Soleus Capital, its second-largest shareholder, as evidence of alignment with long-term investors.

Broadwood’s warning about any “steps to delay a vote” comes as STAAR’s board could potentially consider postponing the October 23 special meeting if the merger appears unlikely to gain approval, a tactic sometimes used in contested M&A situations to buy time for additional vote solicitation or renegotiation.

With the vote set for tomorrow, both the Alcon deal and STAAR’s leadership are on the line.

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