Bausch + Lomb Corporation Stock Rises Amid Reports of Private Equity Interest

Bausch + Lomb Corporation’s (BLCO) stock experienced an increase early Thursday following reports of interest from private equity firms, although it has since moderated some of its gains.

The stock opened at $20.47 but has retraced slightly, now trading up 0.5% at $20.10. Reports suggest that several private equity companies, including prominent firms like Blackstone, Advent International, and TPG Capital, are exploring bids for the company, which has generated notable investor interest.

Analysts from Jefferies have characterized BLCO as an undervalued asset with the potential to realize more value since its spin-off from Bausch Health. They indicate that a leveraged buyout (LBO) might yield a target price of $25 per share, projecting an internal rate of return (IRR) of 21% over five years for a private equity buyer.

Jefferies further emphasizes that BLCO’s robust product pipeline, which includes pending approvals and acquisitions, enhances its appeal as an asset for both private equity firms and strategic buyers.

Bank of America has recognized the private equity interest, but has assigned a “No Rating” to BLCO, stating that the stock is no longer trading based on its fundamentals. They referenced a report indicating that preliminary bids could arrive by Friday, with the possibility of exclusive negotiations beginning in October. Notably, BLCO shares have already risen by 29% this week.

Additionally, Wells Fargo analysts see further potential for BLCO, highlighting that the stock is priced lower than competitors such as Alcon and Cooper Companies. They estimate that a deal priced at a 30% premium could lead to a share price of $23.91, with potential valuations for private equity buyers reaching up to $28.29 per share if operational performance improves after acquisition.