CRL abandons Wuxi takeover after shareholder opposition
The US contract research organisation (CRO), which unveiled its plan in April citing growth in China as a driver, faced considerable shareholder opposition, notably from investment group Jana Partners.
Jana, which became the largest CRL shareholder when bought its 7 per cent stake in June, has been the biggest critic of the takeover, arguing that it offered "inadequate returns" and urging fellow investors to vote against the move.
And, although CRL tried to convince shareholders of the merits of buying Wuxi, Jana's efforts, as well as those of other dissident groups like Relational Investors and Neuberger Berman, seem to have been the more persuasive arguments.
At least, they have if comments made earlier today by CRL CEO James Foster are any indication.
He explained that, despite still believing in the deal, “[CRL] 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.”
Shanghai-headquartered Wuxi, which is set to receive a $30m break-up fee as a result of the mutually-agreed decision to terminate the takeover, also expressed its regret.
CEO Ge Li said: "While we are disappointed that this transaction could not be completed, WuXi remains well positioned to meet our customers' needs and to continue to grow and expand as a standalone company.”
Jana, which had repeated its calls to oppose the deal at a shareholder meeting held late yesterday, has not yet commented on its collapse.