Proxy Power: Activist and Advisors Unite Against STAAR Surgical’s Alcon Sale

NEW YORK, NY – December 08, 2025 – A high-stakes corporate showdown is escalating over the future of STAAR Surgical Company (NASDAQ: STAA), as its proposed $1.5 billion acquisition by eye care giant Alcon Inc. (NYSE: ALC) faces a formidable wall of opposition. In a rare and powerful display of shareholder dissent, the medical device maker's largest investor, Broadwood Partners, has found itself aligned with all three major proxy advisory firms—Egan-Jones, Institutional Shareholder Services (ISS), and Glass Lewis—in recommending a vote against the deal. The unified rejection casts a dark shadow over the transaction and raises critical questions about board conduct, deal valuation, and the very integrity of the sale process.

At the center of the storm is the $28-per-share cash offer from Alcon, a price STAAR’s board has unanimously endorsed as providing “compelling and certain value.” However, this view is not shared by a growing chorus of influential voices who argue the deal significantly undervalues STAAR’s standalone potential and was born from a deeply flawed process. The conflict has now moved beyond a simple disagreement over price, evolving into a full-blown governance crisis that could reshape STAAR’s leadership and strategic direction.

A Process Under Fire

Accusations of a compromised sale process are at the heart of the opposition. Critics, led by Broadwood, which holds a commanding 27% stake in STAAR, point to a series of red flags. Proxy advisory firms have highlighted that STAAR’s board, particularly Chair Elizabeth Yeu and CEO Stephen Farrell, allegedly failed to disclose inbound acquisition interest to the full board or in its proxy statements. This omission, coupled with a pre-existing business relationship between Dr. Yeu and Alcon that concluded less than a year before the deal, has fueled concerns about conflicts of interest and a lack of transparency.

The timing of the merger announcement on August 5, 2025, has also drawn sharp criticism. The deal was revealed just one day before STAAR was set to release second-quarter financial results that ultimately beat expectations. ISS noted this timing was questionable, as it likely prevented the market from fully reappraising STAAR’s value based on its improving performance, potentially weakening the board’s negotiating leverage. Glass Lewis concurred, suggesting the board gave “short shrift” to other expressions of interest and failed to conduct a thorough market check before committing to Alcon.

In a recent report, Egan-Jones bluntly stated its rationale for recommending against the merger: “we believe the credibility and integrity of the transaction have been compromised by the previously non-competitive process. Furthermore, because the same board and executive management team oversaw both the original merger and the subsequent amendment and go-shop process, our concerns regarding objectivity and fairness remain the same.”

The Battle Over Valuation: A Strategic Steal or Fair Value?

While STAAR’s board has promoted the 51% premium to the company’s pre-announcement closing price as a key selling point, opponents argue this metric is misleading. They contend the $28-per-share offer represents a 30.6% discount to STAAR’s 52-week high of $40.36 and fails to capture the company’s long-term growth trajectory. STAAR, a pioneer in implantable lenses for vision correction with its EVO ICL product line, is positioned in a market projected to grow at a compound annual rate of over 13% through the next decade.

The company’s financials paint a picture of a business rebounding from recent headwinds. After struggles in the key China market, STAAR reported strong third-quarter results, with revenue of $94.73 million and adjusted EPS of $0.47, both handily beating analyst estimates. The company boasts a pristine balance sheet with over $192 million in cash and no debt, giving it significant flexibility to execute a standalone growth strategy. Analysts forecast revenue to grow over 42% in the next twelve months, underscoring the potential that activists and proxy firms believe the Alcon deal leaves on the table.

Glass Lewis noted that the implied valuation multiple of approximately 4.56x next-twelve-months revenue falls below the median of comparable healthcare equipment transactions. This valuation disconnect is a core pillar of the opposition's argument that shareholders are being asked to surrender future growth for a cash price that does not reflect the company's intrinsic worth and dominant position in the phakic intraocular lens market.

The Go-Shop ‘Fig Leaf’

In an attempt to quell the rising dissent, STAAR’s board amended the merger agreement to include a 30-day “go-shop” period, which concluded on December 6. The company reported that its financial advisor contacted 21 third parties, but the effort yielded no competing bids. STAAR’s management has since presented this outcome as validation that the Alcon offer is the best available and that its pre-agreement process was sound.

However, activist investor Broadwood Partners has dismissed the effort as a mere procedural formality. Neal C. Bradsher, Founder and President of Broadwood, lambasted the exercise as a “fig leaf, designed to give cover to a conflicted Board and produce only one predetermined outcome: a sale to Alcon at an inadequate price and with golden parachutes that richly reward STAAR’s executives.”

Bradsher’s critique highlights that the go-shop was overseen by the very same directors and advisors who engineered the original deal, a point echoed by Egan-Jones. The lack of new offers, rather than validating the price, is seen by opponents as proof that the process was never intended to be genuinely competitive. This sentiment is amplified by the fact that other significant shareholders, including Yunqi Capital, Defender Capital, and CalSTRS, have also publicly opposed the transaction.

An Impending Shareholder Showdown

With the shareholder vote on the merger postponed to December 19, 2025, the stage is set for a dramatic confrontation. Broadwood is not only urging a 'NO' vote on the deal but is also actively working to call a separate special meeting to remove the three directors it holds most responsible for the contentious sale: Chair Elizabeth Yeu, CEO Stephen Farrell, and Compensation Committee Chair Arthur Butcher. This two-pronged assault puts immense pressure on STAAR’s leadership and board.

The unanimous opposition from the three leading proxy advisory firms provides significant air cover for institutional investors who may be hesitant to vote against a board-recommended transaction. Their detailed reports provide a comprehensive rationale for rejecting the deal, arming shareholders with the analysis needed to make an informed decision. The outcome of the upcoming vote will not only determine the fate of the Alcon acquisition but will also serve as a powerful referendum on the accountability of STAAR’s board and the ability of engaged shareholders to challenge a strategic direction they believe is fundamentally flawed.