Laser equipment maker Coherent (COHR) has picked a winner in the three-company buyout battle that started in January. Optical materials specialist II-VI (COHR 2.37%) gets the nod, sending manufacturing process expert MKS Instruments (MKSI 1.08%) and optical communications equipment giant Lumentum (LITE 0.22%) home empty-handed.

II-VI's winning bid will exchange each Coherent share for $220 in cash and 0.91 shares of II-VI. That offer values the target at $282 per share at Thursday's price for II-VI (though that will, of course, change as the buyer's stock price does). That adds up to a $6.9 billion deal, more than 20% above Lumentum's initial offer for Coherent.

In a separate press release, Lumentum noted that II-VI's bid was 0.7% lower based on Wednesday's closing prices for each stock. Coherent management insisted that the II-VI bid was superior in other ways.

"The combination of II-VI and Coherent will increase our collective exposure to irreversible megatrends for decades to come," said II-VI CEO Vincent Mattera.

An office worker contemplates a mural of jigsaw puzzle pieces, mostly unconnected.

Image source: Getty Images.

The drama started two months ago, when Coherent agreed to a cash-and-stock acquisition by Lumentum with a $5.7 billion total price tag. MKS Instruments stepped in two weeks later, offering slightly more generous terms in another cash-plus-stock bid. On Feb. 16, II-VI joined the fun with another part-stock and part-cash buyout offer. Coherent shrugged off MKS Instruments' bid, but signed a total of three revised term sheets with Lumentum and II-VI over the next several weeks.

Coherent is sending a $218 million breakup fee to Lumentum and preparing to run the customary gauntlet of regulatory and shareholder approvals. The deal is expected to close in the fourth quarter.