Charles River, Wuxi end deal after opposition
NEW YORK (Reuters) - Charles River Laboratories International Inc (CRL.N) and Wuxi PharmaTech (WX.N) on Thursday agreed to end their merger agreement following opposition from investors and proxy advisory firms.
Charles River said it will pay a $30 million breakup fee to Wuxi. It also announced a new $500 million share repurchase plan.
"We believed that this transaction ... would have resulted in long-term strategic benefits for our business and our shareholders," Charles River Chief Executive James Foster said in a statement. "We also value our stockholders' views and given their concerns about the proposed transaction, and our commitment not to proceed without their support, we have decided that terminating the transaction is the appropriate action to take."
In April, U.S. clinical research company Charles River agreed to buy Chinese Rival Wuxi for $1.6 billion to expand its presence in China and deepen its expertise in drug-discovery services.
But the deal faced opposition from several large Charles River investors, including Relational Investors, JANA Partners and Neuberger Berman.
Proxy advisory firm RiskMetrics had also recommended that Charles River's shareholders vote against the proposed deal.
Wuxi, which will report its second quarter earnings on Monday, said it remained well positioned to meet customer needs and continue to grow going forward.
The Chinese company said all of its business units met or exceeded its targets for the second quarter.
Charles River moved its second quarter earnings release to before the market on August 2. The company had previously planned to release its earnings after the stock market closed.
Shares of closed at $31.95 and Wuxi shares closed at $15 on the New York Stock Exchange on Thursday.