Suitors eye contact lens maker

Bausch & Lomb is still struggling to recover from a product recall last year

Eye care firm Bausch & Lomb could be at the centre of a bidding war after its rival Advanced Medical Optics said it was interested in buying the firm.

Bausch & Lomb agreed last week to be bought by US private equity firm Warburg Pincus for $3.67bn (£1.84bn).

Advanced Medical said the price undervalued the maker of contact lenses and indicated it would consider making a higher offer.

The firm was hit last year by a recall of its contact lens solution.

"We believe it is only logical to explore this opportunity given the highly complementary nature of our two businesses," Advanced Medical said.

Bid uncertain

The California-based company, which specialises in laser-vision correction and contact-lens cleaning solution, said it would first review Bausch's financial records, which is expected shortly, before proceeding with a bid.

Bausch declined to comment.

Under the all-cash deal with Warburg Pincus, Bausch has the right to solicit other proposals until early July, but it would have to pay a break-up fee if it accepts any other offer.

A tie-up with smaller rival Advanced Medical would enable the enlarged company to cut costs and align product lines, justifying a higher offer, analysts said.

Last year, Bausch was forced to withdraw its profitable ReNu MoistureLoc contact lens solution in Hong Kong, Singapore and the US amid concerns of potentially blinding Fusarium infections among users.