Charles River Laboratories International, Inc., a global provider of research models and associated services and of preclinical drug development services, has announced that it has mutually agreed with WuXi PharmaTech (Cayman) Inc. to terminate their previously announced acquisition agreement. The Company also announced that its Board of Directors has authorized a new $500 million stock repurchase program.
The termination agreement provides for Charles River to pay WuXi a $30 million breakup fee for full satisfaction of the parties’ obligations under the acquisition agreement and includes mutual releases of any claims and liabilities arising out of or relating to the acquisition agreement. As a result of the termination of the acquisition agreement, the special meeting of Charles River stockholders to be held on August 5, 2010 has been canceled.
James C. Foster, Chairman, President and Chief Executive Officer said, “We believed that this transaction, which would have created the premier early-stage contract research organization, would have resulted in long-term strategic benefits for our business and our shareholders. 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.
“Although we are disappointed in the outcome of the proposed transaction, our overall strategy remains unchanged. We intend to be the premier early-stage CRO and will continue to build our early development capabilities – specifically our discovery services – in order to support our clients’ efforts across a broader portion of the drug development pipeline. We will enhance our portfolio of essential products and services, deepen our scientific expertise and maintain our standards of exceptional client service, all of which distinguish Charles River as an industry leader and make us the strategic partner of choice in early-stage drug development.”
“The Board’s action to authorize a new stock repurchase plan at this time reflects both its belief that our stock price is substantially undervalued and also its faith in Charles River’s future prospects. Repurchasing our stock is another means of enhancing earnings growth and improving stockholder value,” he concluded.