Lumentum Receives Notice of Termination of Coherent Merger Agreement

Rhea-AI Summary

Lumentum Holdings Inc. announced the termination of its merger agreement with Coherent, Inc., which requires Coherent to pay a $217.6 million termination fee. Coherent's Board opted for an inferior offer from II-VI Incorporated, whose proposal was valued at $281.21, compared to Lumentum's superior bid worth $283.12. Lumentum's offer included $230 in cash and stock, while II-VI's consisted of $220 in cash and shares. The news emphasizes Lumentum's commitment to pursuing strategic acquisitions amid competitive offers.

Positive

• Termination of the merger allows Lumentum to seek better acquisition opportunities.
• Coherent's payment of a $217.6 million termination fee strengthens Lumentum's cash position.

Negative

• Loss of potential merger synergies and growth opportunities with Coherent.
• Market perception of Lumentum's competitive disadvantage in acquisition strategies.

SAN JOSE, Calif., March 25, 2021 /PRNewswire/ -- Lumentum Holdings Inc. ("Lumentum") today announced that Coherent, Inc. (NASDAQ: COHR) ("Coherent") has provided notice of termination of the previously announced amended definitive merger agreement with Lumentum entered into on March 9, 2021. Pursuant to the terms of the definitive merger agreement, Coherent is required to pay a $217.6 million termination fee to Lumentum.

Lumentum noted Coherent's Board of Directors chose to accept an offer that is inferior in overall value and cash consideration. Using the closing prices as of March 24, 2021, Lumentum's offer had a value of $283.12 while the value of II–VI Incorporated's (NASDAQ: IIVI) ("II-VI") offer was $281.21.

Lumentum's offer consisted of $230 in cash and 0.6724 shares of Lumentum stock for each share of Coherent. II-VI's offer consisted of $220 in cash and 0.9100 shares of II-VI for each share of Coherent.

Advisors

Deutsche Bank is serving as the exclusive financial advisor to Lumentum and Wilson Sonsini Goodrich & Rosati is serving as legal advisor.

About Lumentum

Lumentum (NASDAQ: LITE) is a major designer and manufacturer of innovative optical and photonic products enabling optical networking and laser applications worldwide. Lumentum optical components and subsystems are part of virtually every type of telecom, enterprise, and data center network. Lumentum lasers enable advanced manufacturing techniques and diverse applications including next-generation 3D sensing capabilities. Lumentum is headquartered in San Jose, California with R&D, manufacturing, and sales offices worldwide. For more information, visit www.lumentum.com.

Lumentum Contact Information

Investors: Jim Fanucchi, (408) 404-5400, investor.relations@lumentum.com
Media: Eric Brielmann or Kelly Sullivan, Joele Frank, Wilkinson Brimmer Katcher, (212) 355-4449

Category: Financial

 

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SOURCE Lumentum Holdings Inc.

FAQ

What was the reason for Coherent terminating the merger agreement with Lumentum?

Coherent accepted a lesser offer from II-VI Incorporated, which was deemed inferior in overall value.

What is the termination fee Coherent must pay Lumentum?

Coherent is required to pay Lumentum a termination fee of $217.6 million.

How does Lumentum's offer compare to II-VI's offer for Coherent?

Lumentum's offer was valued at $283.12, while II-VI's offer was valued at $281.21.

What constitutes Lumentum's offer to acquire Coherent?

Lumentum's offer included $230 in cash and 0.6724 shares of Lumentum stock per share of Coherent.

What impact does the termination of the merger have on Lumentum's stock?

The termination may affect investor sentiment and future merger strategies, potentially impacting Lumentum's stock performance.