From Wall Street Journal
January 28, 2013 7:17pm EST
BAUSCH & LOMB OWNERS SHIFT FOCUS TO IPO
By DANA CIMILLUCA, JONATHAN D. ROCKOFF and ANUPREETA DAS
Bausch & Lomb Inc.'s private-equity owners are leaning toward launching an initial public offering of shares in the eye-health company after possible buyers of the business balked at the asking price of at least $10 billion, according to people familiar with the matter.
Warburg Pincus LLC, which owns Bausch & Lomb, has fielded interest from five potential buyers of the business and asked for initial bids this week, said people familiar with the process.
But the bidders appear unwilling to meet the private-equity firm's asking price and there is now a high likelihood it will stage an IPO this spring or fall, one of the people said.
A Bausch & Lomb spokesman said the company "remains focused on building the best global eye health company, for our customers and the patients they serve."
Warburg had hired Goldman Sachs Group Inc. to explore a sale of Bausch & Lomb after receiving informal expressions of interest from several large health-care companies, people familiar with the matter said in December.
Suitors including Johnson & Johnson, JNJ -0.41% Abbott Laboratories ABT +0.64% and France's Sanofi SA SAN.FR -1.12% have been put off by the asking price, according to people familiar with the matter. A more-approachable price for the potential buyers would be between $8 billion and $9 billion, some of the people said.
A Bausch & Lomb spokesman said the company "remains focused on building the best global eye health company, for our customers and the patients they serve."
Warburg had hired Goldman Sachs Group Inc. to explore a sale of Bausch & Lomb after receiving informal expressions of interest from several large health-care companies, people familiar with the matter said in December.
Suitors including Johnson & Johnson, JNJ -0.41% Abbott Laboratories ABT +0.64% and France's Sanofi SA SAN.FR -1.12% have been put off by the asking price, according to people familiar with the matter. A more-approachable price for the potential buyers would be between $8 billion and $9 billion, some of the people said.
Neither Abbott nor Johnson & Johnson is expected to pursue a formal bid for the business, say people familiar with the matter. The status of other companies' intentions was unclear.
Warburg Pincus hasn't abandoned the idea of a sale. Warburg Pincus will pursue a so-called dual-track approach, preparing for an IPO while leaving the door open should an acceptable offer emerge before a share sale, the people said.
Companies selling businesses that are candidates for an IPO often talk up the possibility of a share sale as a means of putting pressure on industry buyers. At the same time, bidders often talk down their interest in a target company as a way of gaining leverage in price negotiations.
Warburg Pincus may be getting encouragement to pursue a share sale by the buoyant equity markets, which increase the odds that IPO investors will pay up for the stock. Either way, the private-equity firm is likely to reap a big return on its investment in Bausch & Lomb, which makes contact lenses and solutions, prescription drugs and surgical equipment. Warburg Pincus took Bausch & Lomb private in 2007 in a $3.7 billion deal.
