Coherent, California has 3 suitors, and the Board is in favour of Lumentum

When optical components firm Lumentum announced a USD 5.7 billion deal to acquire photonics and lasers specialist Coherent last month, it likely didn’t think it would be the start of a bidding war. But higher offers have now been made to Coherent by MKS Instruments – a $6 billion offer from MKS Instruments and then a $6.5 billion offer from II-VI, the company that had acquired Finisar for $3.2 billion in 2019.

On February 12, 2021, Coherent announced that it has received an unsolicited acquisition proposal from II–VI Incorporated (NASDAQ: IIVI) (“II- VI”) to acquire Coherent in a cash and stock transaction. Under the terms of II-VI’s proposal, each share of Coherent common stock would be exchanged for $130.00 in cash and 1.3055 shares of II-VI common stock at the completion of the transaction.

On February 8, 2021, Coherent announced that it had received an unsolicited acquisition proposal from MKS Instruments (NASDAQ: MKSI) (“MKS”). Under the terms of MKS’ proposal, each share of Coherent common stock would be exchanged for $115.00 in cash and 0.7473 of a share of MKS common stock at the completion of the transaction.

On January 19, 2021, Coherent announced that it had entered into a merger agreement with Lumentum Holdings Inc. (NASDAQ: LITE) (“Lumentum”), pursuant to which Lumentum agreed to acquire Coherent and each share of Coherent common stock would be exchanged for $100.00 in cash and 1.1851 shares of Lumentum common stock at the completion of the transaction.

The pending transaction with Lumentum and proposed transactions with MKS and II-VI would all be subject to customary closing conditions, including receipt of U.S. and foreign antitrust approvals and stockholder approvals.

Coherent’s board of directors, consistent with its fiduciary duties and in consultation with its financial and legal advisors, is carefully reviewing and considering II-VI’s proposal. There can be no assurances that Coherent will conclude that the transaction proposed by II-VI is superior to Coherent’s pending transaction with Lumentum or the proposal from MKS. Coherent stockholders are advised to take no action at this time and encouraged to await a final determination from Coherent’s board of directors.

Notwithstanding its receipt of MKS’ proposal and II-VI’s proposal, Coherent’s board of directors continues to recommend Coherent’s merger agreement with Lumentum to its stockholders. Coherent’s board of directors is not modifying or withdrawing its recommendation with respect to the Lumentum merger agreement and the Lumentum merger at this time, or proposing to do so, and is not making any recommendation with respect to MKS’ proposal or II-VI’s proposal at this time. Bank of America is serving as financial advisor to Coherent and Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal advisor
CT Bureau