Novartis will not go for an all-cash deal to clinch the remaining 23% stake it does not already own in U.S.-listed eyecare group Alcon, Chief Executive Joe Jimenez told Reuters on Wednesday.

"Because this is a merger under Swiss law, we have to offer stock," Jimenez said in an interview ahead of the Swiss drugmaker's investor day in London.

"It doesn't mean cash cannot be part of the deal but it does mean it cannot be a cash deal," Jimenez said. He declined to comment, however, on whether the Novartis offer could include a cash component.

Novartis, which earlier this year completed its buy of a 77% stake in Alcon from Nestle, has so far stuck to its offer to Alcon minority shareholders of 2.8 Novartis shares for each Alcon unit - a bid Alcon's independent director committee has repeatedly rebuffed as too low.

Novartis' share price has risen since the group originally made the offer in January and a strengthening of the Swiss franc against the dollar has also helped lift the value of the offer, which is now worth around $156 per Alcon share, but this is still short of the $180 some Alcon shareholders are looking for. It is also below the Alcon share price, which is trading at around $160.

Novartis bought the first 25% in Alcon in 2008 from Nestle for $143 per Alcon share and earlier this year it exercised an option to buy the additional 52% stake for $180 per share.

Novartis has been banking on Swiss merger law to push its Alcon buyout through. Swiss mergers require approval of two-thirds of shareholders and a simple board majority.

The drugmaker still wants to secure 100% ownership of Alcon, Jimenez said, adding, however, he could not say when the deal would be completed.
"There are significant things the two companies can do together at 77%. Our aspiration is to own 100% but I can't tell you what that timetable will look like," Jimenez said.

Novartis is buying Alcon, which is the dominant player in the multibillion-dollar intraocular lens market, to diversify and insulate itself from the effects of losing patent protection on its big selling medicines, such as blood pressure blockbuster Diovan. Novartis' 77% stake means it is likely to achieve annual pre-tax synergies of $200 million three years after closing the deal with Nestle. It sees a further $100 million on winning 100%.