UPDATE 1-Charles River sees WuXi rev synergies of $75-$100 mln

Tue Jul 13, 2010 10:54am EDT

* Sees rev synergies of at least $75-$100 mln by '13

* Says got second request for more information from FTC

* Says will not proceed with deal without shareholder nod

July 13 (Reuters) - Drug research firm Charles River Laboratories International Inc (CRL.N), which is trying to buy Chinese rival WuXi PharmaTech Inc (WX.N), said it sees revenue synergies of at least $75 million to $100 million by 2013 from the deal.

The company also said it received a second request from the U.S. Federal Trade Commission on July 12 for additional information on certain services.

Charles River's plan to buy WuXi for $1.6 billion in cash and stock has been facing active opposition from the U.S.-based contract research organization's biggest stakeholders, who called the deal expensive, sub-optimal and risky and asked for more details on the expected revenue synergies. [ID:nSGE65G0H7]

The investors had also warned the company "not to endorse any revision to the proposed WuXi transaction that bypasses the need for a stockholder vote."

In an investor presentation on its website, Charles River said it will not proceed with the deal without shareholder approval.

Both Charles River and WuXi have scheduled their shareholder meeting to vote on the deal on Aug. 5 and Charles River said it is still expecting the deal to close by the fourth quarter.

Analysts had said Charles River, which has been saying that it received "overwhelmingly positive" response from its clients on the deal, can give more details on the client responses in order to convince its investors.

In its statement, Charles River also quoted several comments from top executives of pharmaceutical and biotechnology companies supporting the deal, without naming the companies or the executives.

Charles River shares were up about 2 percent to $35.06 on low volumes in morning trade on the New York Stock Exchange, while WuXi shares were up 1 percent to $16.04. (Reporting by Esha Dey in Bangalore; Editing by Aradhana Aravindan)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.