Swiss drugmaker Novartis is, as expected, exercising an option to buy a 52 percent stake in world-leading eye care firm Alcon from Nestle. It is paying $28.1 billion for Nestle’s stake, bringing its holding to 77 percent, and aims to buy out the remaining 23 percent of the company held by minority shareholders for $11.2 billion. What’s raising eyebrows is the offer of 2.80 Novartis shares for each remaining Alcon share, which amounts to just $153 per share compared with the $180 agreed with Nestle.

Novartis already owns CIBA Vision, the contact lens business, and is ogling an enlarged eye care business with pro-forma 2008 net sales of $8.5 billion. Analysts say it will ultimately need to offer minority shareholders more to get them on board.

What might be more eye-catching in this deal is what it could mean for another one. All cashed up, might Nestle – better known for KitKats than contact lenses – wade into the Cadbury deal, giving suitor Kraft’s bid some serious competition?

Nestle said the deal would allow it to launch a new $9.64 billion share buyback program. While Nestle has indicated it is only in the M&A market for smaller deals, that kind of money could well wind up burning a big hole in its pocket, one that is a couple of billion bigger than the $16.2 billion offer Kraft already has on the table.