LCA-Vision Inc./LasikPlus (LCAV)

[garza]

LCA-Vision Inc. The company is seeking a merger partner - NY Post

Saturday, December 27, 2008 1:49:21 PM

http://www.nypost.com/seven/12272008/business/gutfreunds_lasik_firm_eyeballs_merger_146047.htm

Legendary Wall Street honcho John Gutfreund's ailing Lasik company has been quietly on the prowl for a merger partner, among other "strategic alternatives," even as officials publicly rebuff demands for a shake-up.

LCA-Vision, the laser-surgery chain where Gutfreund serves on the board, held talks on a possible merger with competitor TLC Vision in recent months, sources tell The Post.

The beleaguered company also held talks with Glasgow, Scotland-based Optical Express about a possible union, as well as talks with bankers about the possibility of taking the company private through a management-led buyout.

Gutfreund, the former head of Salomon Brothers, was known as the "King of Wall Street" in the 1980s. He was later banned from ever running a brokerage firm amid a Treasury bond-trading scandal.

Word of the company's secretive pursuit of alternatives comes amid growing external pressure for change at the Cincinnati company.

A group of dissident shareholders, including founder Stephen Joffe, have asked for representation on the board of directors.

The company's employees have also pushed for management change at the top, only to be rebuffed by Gutfreund and the rest of the board.

As reported by The Post earlier this month, the company's surgeons - who run the nationwide chain of more than 70 surgery centers - have repeatedly asked the board for the head of CEO Steve Straus.

LCA-Vision's leaders even went so far as to hire investment-banking advisers KeyBanc Capital Markets to help them sort through options.

Earlier this year, KBCM advised the directors that their best bet, given the flailing stock price, was to pursue a stock-based transaction with TLC, according to documents obtained by The Post.

Officials from LCA-Vision as well as TLC declined to comment.

The company's stock is down more than 80 percent this year to $3.86, from $21.34 this time last year.