Zurich: Novartis AG's proposed takeover of Alcon Inc, the world's largest eye-care company, may bypass protections aimed at ensuring fair value for minority shareholders, Alcon's independent committee said.

Novartis offered to buy the rest of Alcon from Nestle SA and minority investors for about $39.3 billion (Dh144.23 billion) on Monday.

"Alcon has established certain important protections for the benefit of Alcon's minority shareholders against a coercive takeover bid and is disappointed that Novartis is attempting to circumvent those protections," Alcon's independent director committee said in a statement.

Acquiring Alcon would expand Novartis's eye-care businesses including Ciba Vision and the Lucentis blindness medicine to help fuel growth as patents on the company's best-selling Diovan and Gleevec treatments start to expire in the US in 2012.

Basel, Switzerland-based Novartis is exercising a call option it agreed to with Nestle in April 2008.

Nestle will sell a 52 per cent stake in Alcon, the maker of Opti-Free contact lens cleaners, for an average of $180 a share, or $28.1 billion in total, the Swiss drugmaker said. Novartis will own about 77 per cent of Alcon after the purchase.

Own stock

Novartis also offered to pay 2.8 of its own stock for each Alcon share held by the public, or about $11.2 billion for the 23 per cent stake.

"It's an excellent opportunity to acquire the world leader in eye care," Chief Executive Officer Daniel Vasella said on a call with reporters. "Overall I think it's a great strategic fit and I'm very optimistic about the outlook of the business."

Hunenberg, Switzerland-based Alcon created a committee of independent directors in December 2008 to protect minority investors in transactions that included major shareholders, according to the committee statement.

Swiss law

Alcon's directors said Novartis plans to go ahead with the purchase even if it doesn't gain the approval of the eye-care product maker's board. Novartis said the offer is fair for Alcon's minority shareholders and Swiss law allows the transaction to proceed without Alcon's approval once it purchases Nestle's 52 per cent of the company, according to a transcript of Novartis's conference call with investors.

The independent committee is evaluating the Novartis offer and will issue a recommendation once its review is completed, the directors said in their statement.

Alcon fell 5.7 per cent to $154.98 on the New York Stock Exchange on Monday. Novartis dropped 2.6 per cent to 55.05 Swiss francs in Zurich trading, while Nestle gained 1.5 per cent to 50.95 francs.

Nestle sold a 25 per cent stake in Alcon to Novartis in July 2008 for $10.4 billion. Novartis has spent at least $59 billion on acquisitions over the past five years, according to data compiled by Bloomberg. The Swiss company has purchased Chiron Corp, adding new vaccines, as well as Hexal AG and Eon Labs Inc to expand in generic medicines.

Alcon obtained 46 per cent of revenue from devices and products used in eye surgery in 2008. The company, whose products include treatments for eye infections and glaucoma and machines used in cataract operations, had an operating profit margin of 35 per cent in 2008, compared with Novartis's 22 per cent.

Novartis, which had $14.2 billion of cash as of September 30, said it will fund the stake purchase through available cash and external financing of as much as $16 billion in short-term and long-term debt. The transactions to gain full control of Alcon aren't expected to affect the group's credit ratings, Novartis said.