Coherent, Inc. (NASDAQ: COHR) revealed that it has received revised purchase offers from II-VI (NASDAQ: IIVI), MKS Instruments (NASDAQ: MKSI), and original bidder Lumentum Holdings (NASDAQ: LITE). The new offer from II-VI, in which each share of Coherent common stock would be exchanged for $170.00 in cash and 1.0981 shares of II-VI common stock, has been deemed a “Company Superior Proposal” under the terms of the purchase agreement with Lumentum, the board asserts. The board therefore has informed Lumentum that it plans to terminate the purchase agreement unless Lumentum comes up with an offer by 11:59 p.m. Pacific Time on March 11, 2021 that the board would consider at least equal.
Lumentum has already revised its offer at least twice, the board also disclosed. One revision called for Lumentum to pay $175.00 in cash and 1.0109 shares of Lumentum common stock for each Coherent share but came with what the Coherent board termed “a significantly higher termination fee as a condition to accepting competing acquisition proposals.” Another offer reduced the cash portion to $170.00 and kept the stock offer the same; this time, the revised termination fee was “meaningfully higher.”
The Coherent board perhaps anticipates further bidding, given its focus on the termination fees attached to Lumentum’s enhanced offerings. The board stated it would offer judgment of further offers from Lumentum “after taking into account all aspects of any such proposal Coherent may receive” from the company. Coherent also removed a message regarding the potential tie-up with Lumentum that had been posted on its homepage since the announcement of the original sale agreement.
For its part, MKS offered $135.00 in cash and 0.7516 of a share of MKS common stock, subject to a collar, per Coherent share.
Lumentum acknowledged receipt of the message from the Coherent board and said it would review the latest proposal from II-VI before it decided on a response. The company also noted that Coherent will have to pay a $217.6 million termination fee if the original sales agreement is not honored.
Lumentum’s original offer called for $100.00 per share in cash and 1.1851 shares of Lumentum common stock for each Coherent share, a total outlay of $5.7 billion (see “II-VI trumps Lumentum, MKS Instruments with new bid for Coherent”). MKS then countered with an offer of $115.00 in cash and 0.7473 of a share of MKS common stock (see “MKS Instruments files bid for Coherent in defiance of Lumentum sales agreement”), only to be topped by the original offer from II-VI of $130.00 in cash and 1.3055 II-VI common shares for a total of approximately $6.5 billion (see “II-VI trumps Lumentum, MKS Instruments with new bid for Coherent”).
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