Lumentum raises Coherent bid proposal to $6.9bn

Lumentum has increased its proposed offer for Coherent to $6.9bn (£5bn) - the biggest so far in a three-way tussle to buy the US optical fibre company.

Under the terms of the proposal Coherent shareholders would receive $220 a share in cash and 0.61 Lumentum share for each of Coherent share.

The proposal is worth $275 per Coherent share. Lumentum said as part of the proposal Silver Lake, a global technology investor, would invest $1bn in the combined group.

Lumentum said it was confident it could extract more synergies from the deal than previously predicted and estimated $219m to $244m of synergies.

Alan Lowe, Lumentum's chief executive, said: "We are pleased to now pursue this combination with the support of Silver Lake, whose investment is a compelling indicator of the power of this transformative opportunity."

Lumentum agreed a deal to buy Coherent for $5.7bn in January. The agreement was derailed when MKS Instruments and II-VI made counter-offers, triggering a series of raised offers from II-VI and Lumentum.

The bidders are looking to increase their share of the market for photonics, which is placed to gain from increasing adoption of 5G and consumer electronics.