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When shareholders attack, it’s not just the news that suffers
September 2010
SHARING OPTIONS:
It's the phone call or e-mail
that every publication editor dreads.
It comes seconds before deadline time, as the content your editorial team has
worked for the last month to
produce is committed to print. It comes from a
writer whose story has morphed so materially from its original state that it
can't run as planned—
usually leaving a black hole in your layout to be filled
at the eleventh hour.
It doesn't happen
often, but in the last few months here at ddn, it has become a monthly freak-out moment for us
all. This time, the voice on the other end of the
line belonged to our veteran
reporter and science guru, Lloyd Dunlap, who delivered the unfortunate news
that his story about Axela's acquisition of Xceed Molecular was a
no-go. In this case, the financing for the deal—which was to take
place in
Canada, an area especially hard-hit from the economic recession—fell through. I
encouraged Lloyd to report on this new development to the best
of his ability,
because although it tells a story that is quite different from what the
companies probably expected, it's still an important one to
share with our
readers.
Financing problems have plagued several similar deals
lately, but the
real scene-stealer over the last few months has been
shareholders who feel like they are getting the shaft. This summer, many
companies said "thanks,
but no thanks" to acquisition offers, feeling they are
not being valued at their true worth—and keeping our newsroom glued to our
computers for
updates as fun in the sun passed us by.
In July, mere weeks after Charles River Laboratories
International Inc.'s $1.6 billion bid for
Chinese drug developer WuXi
PharmaTech Inc. graced our cover,
shareholders objected and the merger was
canceled. Topping WuXi shareholders' list of objections were that the
acquisition price was "excessive and
relies on highly aggressive assumptions to
value WuXi" and that the claimed revenue synergies were "highly speculative"
and the strategic benefits
"questionable."
The cover story from our July issue, which reported on
Celgene's $3 billion-plus offer for Abraxis BioScience, also hit a snafu
shortly before press time. Although the deal has
cleared regulatory hurdles,
Abraxis shareholders have filed a lawsuit alleging that the company's board of
directors breached their fiduciary duty for
failing to adequately shop for fair
offers and selling Abraxis too cheaply. The final chapter on this melee is yet
to be written.
However, at least one shareholder saga recently had a happy
ending. The tempestuous pas de deux that
has been Novartis' courtship of eye-care company Alcon Inc.—which we have been
covering since April 2008—has
birthed a $28.3 billion all-cash deal that gives
Novartis a controlling stake in Alcon. Some Alcon shareholders opposed the
move, claiming that
Novartis offered less per share than it paid to Alcon's
parent company, Nestle, for its stake.
Finally, this month, we are once again rolling the dice on
our
cover story, which details sanofi-aventis'
long-awaited bid for Cambridge,
Mass.-based biotech Genzyme Corp.
As we went to press, the non-binding offer
came in at $18.5 billion, or $69 a share, after several unsuccessful attempts
to reach an agreement with
Genzyme. Genzyme promptly refused the offer. For
months, rumors have swirled that sanofi would pursue a possible hostile
takeover of Genzyme, or back
off its offer and simply find a different U.S.
firm to bring into its France-base fold. As a decision on this deal is pending,
you can expect to see
ddn give this
story some more ink. Stay tuned for the next installment in what I am calling
the Shareholder Soap Opera of 2010. Back |
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