Bausch + Lomb said it authorized management and advisers to explore a potential sale of the eye health company after shares dropped over reports of faltering deal talks with a group of private equity firms.
The company said a sale was “one of several options being explored to complete a full separation from Bausch Health Companies Inc.,” in a statement on Thursday. “That process is ongoing, and there can be no assurance that it will result in a transaction.”
The company said it typically didn’t comment on deal negotiations but wanted to issue a response to a request for information from the Canadian Investment Regulatory Organization. “CIRO requested confirmation of a potential sale process given stock volatility often associated with market rumors. Bausch + Lomb does not intend to provide additional detail until further disclosure is appropriate or necessary,” the company said.
The company is traded on both the New York Stock Exchange and Toronto Stock Exchange. The shares have gained 6.5% this year through Wednesday’s close in New York. The company’s stock tumbled yesterday after the Financial Times reported that Blackstone could pull out of a joint takeover bid for the eye care company, citing unidentified people familiar with matter.
If Bausch Health sells the eye care company it majority owns, it would end a yearslong battle over the separation of the eye-care business. The split has been in the works since as early as 2020, but it ran aground due to disagreements between shareholders and lenders, as well as questions about Bausch Health’s financial health.
Bausch Health has about $21 billion in debt, according to data compiled by Bloomberg. Questions about whether the company could remain solvent without Bausch + Lomb have complicated the separation.
Bausch + Lomb sells contact lenses, eye drops and other products that generate a steady revenue stream. Bausch Health’s main drug, the gut antibiotic Xifaxan, will likely face generic competition in the coming years as patent protection wanes.
Bausch Health was formerly known as Valeant Pharmaceuticals. It rebranded in 2018 after the company came under government scrutiny for raising drug prices and a former executive was convicted of accepting a bribe.
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