Charles River calls off WuXi Pharmatech buy on shareholder opposition; Pfizer sells Idun to Conatus

US medical research equipment and services company Charles River Laboratories International said Friday it is canceling a $1.6 billion acquisition of Chinese R&D outsourcing firm WuXi PharmaTech after shareholder objections to the deal's price and strategic value.

Had the deal gone ahead, it would have been the biggest takeover of a Chinese company (The Pharma Letter April 27). The $1.6 billion cash-and-shares bid, however, was equivalent to 16 times Wuxi's 2010 earnings before interest, tax, depreciation and amortisation ' almost exactly double Charles River's own forward EBITDA multiple. That seemed exceptionally bullish for a target with falling gross margins and declining sales growth, noted the UK's Financial Times.

"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," said Charles River's chairman, James Foster, in a statement. The company, based in Wilmington, Massachusetts, said it would pay WuXi PharmaTech a $30 million break fee.