Yunqi Capital Reaffirms Opposition to STAAR Surgical–Alcon Deal, Urges Shareholders to Support Standalone Value Creation
Yunqi Capital Limited, together with its affiliates and the funds it advises (collectively, “Yunqi Capital”), has once again made clear its firm opposition to the proposed acquisition of STAAR Surgical Company by Alcon Inc., even following Alcon’s revised offer price of $30.75 per share. As a long-term investor and a 5.1% shareholder in STAAR Surgical Company (“STAAR” or the “Company”), Yunqi Capital has positioned itself as one of the most vocal and analytically grounded critics of the transaction, arguing that the deal materially undervalues STAAR’s long-term growth potential and fails to reflect the true strategic worth of the Company’s assets and market positioning.
In a detailed letter addressed to fellow STAAR shareholders and dated December 17, 2025, Yunqi Capital responded directly to the updated recommendations issued by proxy advisory firms Institutional Shareholder Services Inc. (“ISS”) and Glass, Lewis & Co., LLC (“Glass Lewis”). While acknowledging the complexity of the decision facing shareholders, Yunqi Capital emphasized that recent developments only strengthen the case for rejecting the proposed merger and allowing STAAR to continue operating as an independent company.
Proxy Advisor Reports Reinforce the Case Against the Transaction
Yunqi Capital expressed strong alignment with Glass Lewis, which has maintained a firm recommendation against the transaction. According to Yunqi Capital, Glass Lewis’s updated report provides a comprehensive and well-reasoned critique of the proposed acquisition, highlighting fundamental concerns related to valuation, process integrity, and the long-term strategic implications of selling STAAR at this juncture.
Although ISS recently shifted its recommendation to support the transaction, Yunqi Capital noted that even ISS acknowledged that it would not be unreasonable for shareholders to remain opposed. This caveat, Yunqi Capital argued, underscores the inherent weaknesses of the deal and reflects lingering doubts about whether the proposed transaction truly serves the best interests of STAAR shareholders.
From Yunqi Capital’s perspective, the divergence between the two proxy advisory firms further validates the importance of shareholders conducting their own independent analysis rather than relying solely on headline recommendations. In Yunqi Capital’s view, a closer examination of the facts points clearly toward rejecting the merger and preserving STAAR’s standalone future.
Strategic Alternatives Remain Viable and Undervalued
Central to Yunqi Capital’s argument is the belief that shareholder value would be maximized if STAAR were to terminate the current agreement with Alcon and pursue a more deliberate and comprehensive review of strategic alternatives at a later date. Rather than rushing into a sale during a period of operational transition, Yunqi Capital contends that STAAR should allow its improving business fundamentals and product momentum to fully materialize.
Yunqi Capital pointed to developments during the go-shop period as evidence that the process was insufficient and potentially flawed. When STAAR initially announced the conclusion of the go-shop period, the Company did not disclose that a well-known and credible potential buyer had emerged during that timeframe. This party, according to Yunqi Capital, possessed both the financial capacity and industry expertise necessary to pursue a transaction at a higher valuation.
Although Yunqi Capital stopped short of accusing STAAR of wrongdoing, it emphasized that the emergence of such a party is highly relevant to shareholders’ assessment of whether the go-shop process truly achieved its intended purpose. The fact that this potential buyer came forward suggests that broader interest in STAAR exists and that the Company may command a higher price under more favorable circumstances.
Questions Surrounding Disclosure and Engagement During the Go-Shop
Following inquiries from other shareholders, STAAR later acknowledged the appearance of this third party in a subsequent press release. In doing so, the Company stated that the potential buyer had not made contact until the beginning of the third week of the go-shop period—language that Yunqi Capital believes was framed in a way that implicitly downplayed the significance and credibility of the outreach.
Yunqi Capital argued that, rather than undermining the third party’s interest, this disclosure actually highlights shortcomings in STAAR’s outreach efforts. Despite claiming to have solicited proposals from a “wide range of potentially interested third parties,” STAAR failed to proactively engage a prominent and experienced participant in the global ophthalmic and healthcare investment landscape—particularly one with a strong presence in Asia, one of STAAR’s most critical growth regions.
Moreover, Yunqi Capital noted that STAAR’s decision to publicly name the third party in an unconventional manner may have discouraged further engagement. While the long-term impact of this decision remains uncertain, Yunqi Capital believes it likely contributed to the third party stepping back, at least temporarily, from the process.
A Broader Universe of Potential Buyers Exists
While STAAR has stated that it engaged with 21 third parties during the go-shop period, Yunqi Capital questioned whether this number adequately reflects the full universe of strategic and financial buyers that could reasonably be interested in STAAR’s business. Given the Company’s unique positioning, proprietary technology, and global footprint, Yunqi Capital believes that significantly more than 21 parties could represent credible potential acquirers.
In Yunqi Capital’s assessment, the ophthalmic device market continues to attract substantial strategic and private capital interest, driven by demographic trends, rising rates of myopia, and growing demand for vision correction solutions. Against this backdrop, STAAR’s assets—particularly its Implantable Collamer Lens (ICL) platform—represent a scarce and highly valuable opportunity.
Importantly, Yunqi Capital emphasized that interest from credible buyers is unlikely to disappear simply because the current transaction is terminated. On the contrary, it believes that additional parties, including those with deep expertise in Asia and emerging markets, are likely to remain active and re-engage under improved circumstances.
Business Fundamentals Remain Strong Despite Leadership Uncertainty
One of the primary concerns cited by ISS in changing its recommendation was uncertainty surrounding STAAR’s leadership in the event that the transaction fails. ISS suggested that shareholders could not rely on the incumbent leadership team and would therefore face elevated execution risk if the deal were rejected.
Yunqi Capital strongly disagreed with this conclusion. While acknowledging that leadership changes may occur following a failed merger vote, Yunqi Capital argued that such changes do not undermine the fundamental strength of STAAR’s business. In its view, the Company’s value is rooted in durable assets, proven technology, and favorable market dynamics—not solely in the tenure of its current executives.
In the near term, Yunqi Capital believes STAAR can maintain operational continuity while the Board evaluates and implements leadership adjustments as necessary. This period of transition, Yunqi Capital argued, should not be conflated with a deterioration in the Company’s underlying prospects.
Core Value Drivers Remain Intact
Yunqi Capital highlighted several enduring strengths that continue to underpin STAAR’s valuation. These include its proprietary ICL technology, which offers a differentiated solution for patients seeking vision correction; its established global distribution infrastructure; and its deep penetration in high-growth international markets.
Demand for ICL procedures continues to expand, supported by rising myopia prevalence and increasing consumer awareness of alternatives to traditional refractive surgery. According to Yunqi Capital, relevant economic data and market indicators point to accelerating adoption, reinforcing the Company’s long-term growth trajectory.
ISS itself acknowledged skepticism toward STAAR management’s more pessimistic outlook, noting that shareholders have reason to question whether the Board’s messaging around operational downside risks is fully credible. Yunqi Capital seized on this observation as further validation that the Company’s standalone prospects may be stronger than management has suggested.
China Represents a Significant and Underappreciated Opportunity
Yunqi Capital also addressed recent commentary from STAAR management regarding softer sales trends in China during the fourth quarter of 2025. While management characterized these trends as downward, Yunqi Capital noted that actual performance was materially better than its own expectations.
More importantly, Yunqi Capital emphasized that near-term fluctuations must be viewed in the context of an impending product launch with substantial revenue implications. In January 2026, STAAR is scheduled to introduce the EVO ICL V5 product line in China—a differentiated offering that Yunqi Capital believes will serve as a powerful growth catalyst.
Ahead of this launch, Yunqi Capital expects distributors to deliberately reduce inventory of existing products to minimize obsolescence risk and allocate capital toward the new line. This behavior, while temporarily impacting reported sales, should not be interpreted as a weakening of end-market demand.
According to Yunqi Capital’s on-the-ground research, the EVO ICL V5 is expected to command a price premium of approximately 30% to 70% over existing ICL products. This increase in blended average selling price represents a meaningful and underappreciated driver of revenue growth in 2026 and beyond.
Shareholders Should Retain the Upside, Not Transfer It to Alcon
Yunqi Capital argued that it would be fundamentally unjust for STAAR’s improving business momentum to be transferred to Alcon at a valuation that fails to reflect its full potential. Long-term STAAR shareholders, who have supported the Company through cycles and understand its strategic value, should be the primary beneficiaries of future upside—not Alcon’s shareholders.
In Yunqi Capital’s view, selling STAAR now—particularly amid leadership uncertainty and before key growth initiatives fully materialize—would lock in an outcome that disproportionately favors the acquirer. The revised offer price, while higher than the initial bid, still falls short of what Yunqi Capital considers fair value.
A Clear Call to Action for Shareholders
Yunqi Capital concluded its letter by reiterating its intention to vote all of its shares against the amended merger agreement. It urged fellow shareholders to do the same and to maintain confidence in STAAR’s standalone prospects.
According to Yunqi Capital, rejecting the deal does not represent a leap into the unknown, but rather a rational decision grounded in the Company’s strong fundamentals, improving outlook, and the likelihood of superior strategic opportunities in the future. By voting against the transaction, shareholders can preserve optionality and allow STAAR the time and space needed to realize its full value.
As the shareholder vote approaches, Yunqi Capital’s message is clear: STAAR’s best days lie ahead as an independent company, and shareholders should not settle for a transaction that undervalues a business with significant long-term potential.
About Yunqi Capital
Yunqi Capital is a Hong Kong headquartered investment manager with over US$250 million in assets under management. The firm deploys a fundamental long-short equity strategy, with a concentrated portfolio, that is primarily invested in the equity securities of companies with a significant China connection. Yunqi Capital is led by CIO Chris Wang, an experienced portfolio manager with a strong track record of generating attractive returns on capital, controlling portfolio risk and managing investment teams.
