12 March 2021
Coherent declares new II-VI acquisition proposal superior to amended Lumentum merger agreement
Coherent Inc of Santa Clara, CA, USA says that its board of directors, in consultation with its financial and legal advisors, has determined that a revised acquisition proposal from engineered materials and optoelectronic component maker II-VI Inc of Saxonburg, PA on 11 March constitutes a ‘Company Superior Proposal’ under the terms of Coherent’s pending revised merger agreement of 10 March with Lumentum Holdings Inc of San Jose, CA (which designs and makes photonic products for optical networks and lasers in industrial and consumer markets).
Lumentum’s initial offer on 18 January amounted to $5.7bn ($100 per share in cash and 1.1851 shares of Lumentum common stock for each Coherent share), a premium of 49% to Coherent’s closing share price on 15 January.
Also, on 8 February, Coherent received an unsolicited offer from MKS Instruments Inc of $115 per share in cash and 0.7473 shares of MKS common stock (subsequently increased to $135 per share in cash and 0.7516 shares of MKS common stock).
On 8 March, Coherent’s board said that it had received a ‘Company Superior Proposal’ on 5 March from II-VI Inc of $170 per share in cash and 1.0981 shares of II-VI common stock (equating to $260 per Coherent share, implying a total enterprise value of $6.5bn).
Lumentum’s subsequent revised deal on 10 March comprised $175 per share in cash and 1.0109 shares of Lumentum common stock for each Coherent share (equating to $261.62 per Coherent share, and $6.6bn in total, giving Coherent stockholders about 24% of the combined company).
Under the terms of II-VI’s most recent revised proposal, each share of Coherent common stock would be exchanged for $195 per share in cash and 1.0 share of II-VI common stock at the completion of the transaction.
Founded in 1966 and a provider of lasers and laser-based technology for scientific, commercial and industrial applications, Coherent’s common stock is listed on the Nasdaq Global Select Market and is part of the Russell 1000 and Standard & Poor’s MidCap 400 Index.
Coherent has notified Lumentum that it intends to terminate their amended merger agreement unless Coherent receives a revised proposal from Lumentum by 11:59pm Pacific Time on 17 March that its board determines to be at least as favorable to stockholders as II-VI’s revised proposal, after taking into account all aspects of any such proposal that Coherent may receive from Lumentum.
Bank of America and Credit Suisse are serving as financial advisors to Coherent, and Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal advisor.