II-VI to acquire Coherent after bidding war with Lumentum and MKS Instruments

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Laser manufacturer Coherent has accepted II-VI's offer of $7.01bn, made on 17 March, following a bidding war with Lumentum and MKS Instruments. 

Coherent had initally accepted an offer of $5.7bn from Lumentum in January. However, the company received subsequent bids from MKS Instruments and II-VI. 

Lumentum's last bid of $7.03bn was made on 22 March. On 24 March II-VI announced it was sticking with its $7.01bn bid.

Coherent has today decided to accept II-VI's offer and will pay Lumentum the $217.6 million termination fee contemplated by their merger agreement. 

'In making its determination, the Coherent board of directors evaluated the comparative benefits and risks of the II-VI and Lumentum proposals, including the near-term and long-term financial opportunities and risks presented by each proposal, the potential synergies available through a combination with each company, and the complementary businesses of each company,' Coherent said in a statement

Lumentum said in an announcement: 'Coherent's board of directors chose to accept an offer that is inferior in overall value and cash consideration. Using the closing prices as of 24 March 2021, Lumentum's offer had a value of $283.12 [per Coherent share] while the value of II–VI Incorporated's offer was $281.21.'

Summary of the Coherent bidding war:

19 January: Coherent accepts a $5.7bn acquisition offer from Lumentum

Coherent stockholders would receive $100.00 per share in cash and 1.1851 shares of Lumentum common stock for each Coherent share they own.

8 February: Coherent receives a $6bn acquisition offer from MKS Instruments

Each share of Coherent common stock would be exchanged for $115.00 in cash and 0.7473 of a share of MKS common stock.

12 February: Coherent receives a $6.4bn acquisition offer from II-VI

Each share of Coherent common stock would be exchanged for $130.00 in cash and 1.3055 shares of II-VI common stock. ​

8 March: Coherent determines that a revised $6.5bn offer from II-VI is superior to two revised offers from Lumentum and a revised offer from MKS Instruments

Each share of Coherent common stock would be exchanged for $170.00 in cash and 1.0981 shares of II-VI common stock. 

Under one of Lumentum’s revised proposals, each share of Coherent common stock would be exchanged for $175.00 in cash and 1.0109 shares of Lumentum common stock, coupled with a significantly high termination fee as a condition to accepting competing acquisition proposals. Under the other revised Lumentum proposal, each share of Coherent common stock would be exchanged for $170.00 in cash and 1.0109 shares of Lumentum common stock, coupled with a meaningfully high termination fee as a condition to accepting competing acquisition proposals.

Under the terms of MKS’ revised proposal, each share of Coherent common stock would be exchanged for $135.00 in cash and 0.7516 of a share of MKS common stock.

9 March: Coherent signs a revised $6.6bn merger agreement with Lumentum

Each share of Coherent common stock would be exchanged for $175.00 in cash and 1.0109 shares of Lumentum common stock. A $217.6m termination fee would be payable to Lumentum should Coherent accept a competing offer.

12 March: Coherent determines that a newly revised $6.8 billion offer from II-VI is superior to Lumentum’s offer

Each share of Coherent common stock would be exchanged for $195 in cash and 1.0 shares of II-VI common stock. 

17 MarchCoherent receives a revised $6.9bn acquisition offer from Lumentum and a revised $7.01bn acquisition offer from II-VI

Under the Lumentum proposal, each share of Coherent common stock would be exchanged for $220 in cash and 0.61 of a share of Lumentum common stock.

Under the II-VI proposal, each share of Coherent common stock would be exchanged for $220 in cash and 0.91 of a share of II-VI common stock.

Coherent determines the II-VI offer to be superior and notifes Lumentum that it intends to terminate their merger agreement unless it receives a revised acquisition proposal from Lumentum by 11:59pm Pacific Time on 22 March. Coherent would be required to pay the $217.6m termination fee to Lumentum if it accepts the II-VI agreement.

22 March: Coherent receives a revised $7.03bn acquisition offer from Lumentum

Each share of Coherent common stock would be exchanged for $230 in cash and 0.6724 of a share of Lumentum common stock. 

The revised proposal will remain open until 11:59pm Pacific Time on Wednesday 24 March to provide Coherent's board with adequate time to evaluate the proposal. 

24 March: II-VI maintains current proposal

II-VI informs Coherent that it will maintiain it's current proposal, made on 17 March, which will expire at Noon Pacific Time on Thursday 25 March. II-VI believes its proposal would create significant value for the shareholders of both companies and that it remains superior to Lumentum’s latest proposal.

24 March: Coherent accepts II-VI proposal

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