Lumentum Holdings Inc. (NASDAQ: LITE) has regained preferred buyer status with Coherent, Inc. (NASDAQ: COHR) after submitting an acceptable offer for the company by the deadline Coherent imposed earlier in the week. Coherent has set the deadline after it had deemed a revised offer from II-VI (NASDAQ: IIVI) a “Company Superior Proposal” under the terms with the sale agreement it originally signed with Lumentum this past January (see “Lumentum to buy Coherent to expand laser and photonics reach”).
The new sales agreement compels Lumentum to exchange $175.00 in cash and 1.0109 shares of Lumentum common stock for each share of Coherent common stock, a total consideration of a of $261.62 per Coherent share or $6.6 billion in total. II-VI had offered $170.00 in cash and 1.0981 shares of II-VI common stock in its most recent proposal, which equates to an enterprise value of $6.5 billion (see “Coherent board: Revised II-VI purchase proposal superior”).
Lumentum says it expects the deal to close in the second half of calendar year 2021, subject to approval by Lumentum's and Coherent's stockholders, receipt of remaining regulatory approvals (the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 has expired without incident), and other customary closing conditions. However, observers believe the bidding isn’t over yet and expect II-VI and possibly MKS Instruments to take another run at stealing away Lumentum’s prize. Significantly, Coherent says the termination fee on the agreement has not been changed from that originally specified. Coherent had rejected a pair of Lumentum proposals that had increased the termination fee in the runup to accepting II-VI’s most recent bid.
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