Investor urges STAAR Surgical to spin off Asia unit - letter
By Svea Herbst-Bayliss
NEW YORK, Oct 31 (Reuters) - Investment firm Anatole Investment Management called on STAAR Surgical Company to consider spinning off its Asia or China business, arguing the standalone China business could be worth as much as $5 billion, according to its letter to the company.
Hong Kong-based Anatole, which owns roughly 4.2% of the Monrovia, California headquartered company's shares, said STAAR is undervalued and not reaching its "huge growth potential."
STAAR designs, makes and sells lenses that can be implanted during eye surgeries.
Since February, STAAR's stock price has dropped nearly 50%. It closed at $41.82 on Tuesday.
Pointing to a large market in China and research that suggests female patients are willing to pay more for brand and product quality, the investment firm wrote that management should raise prices and streamline the sales process.
Most importantly, the investment firm urged STAAR to hire investment bankers or corporate finance advisers to consider spinning off the Asia business, which it said makes up close to 80% of total sales.
"We suggest that the company consider spinning off its Asia or China business and listing it on one of the Asian exchanges," Anatole wrote in the Oct. 20 letter to STAAR's board. "STAAR’s China business alone is worth $5 billion in our estimation."
The letter has not been reported.
STAAR has a market capitalization of $2 billion.
The letter was posted on Anatole's website. Anatole did not respond to emails or calls for comment.
A STAAR spokesman said that the company has responded to Anatole's letter.
"We welcome and appreciate input from our shareholders and our management team and board regularly review opportunities to maximize value for all shareholders, so we are open-minded as to best paths to achieve this objective," the STAAR spokesperson said.
Asian investors are closer to the company's core market and would have a better understanding of the business's value, Anatole said. "The spin-off would result in a change of the investor base, thereby helping to narrow the gap between STAAR's intrinsic value and its market value," the letter said.
(Reporting by Svea Herbst-Bayliss; Editing by Rod Nickel)
