CalSTRS Opposes Charles River Laboratories Acquisition
Adding Chinese firm adds risk, lacks sufficient returns for shareholders.
WEST SACRAMENTO, CA– The California State Teachers’ Retirement System (CalSTRS) has notified the board of directors at Charles River Laboratories, Inc. (NYSE: CRL), that it will not support the drug research company’s buyout of China’s WuXi PharmaTech Inc (NYSE: WX).
In a letter to directors, CalSTRS said the high price for WuXi “adds unnecessary risk” and “does not offer Charles River shareholders sufficient returns.” CalSTRS also expressed concern that the board might alter terms of the deal to permit the acquisition without shareholder approval.
“We strongly urge the board to carefully consider the consequences of such an action. While it may be technically possible for the board to close the transaction without a shareholder vote, we believe disenfranchising the owners of the company would be ill-advised,” the letter said.
CalSTRS urged Charles River directors to take notice of what other institutional investors are saying through their statements, letters, filings and the decline in stock price, and terminate the transaction.
The Charles River special shareholders meeting to vote on the transaction is scheduled to be held on August 5, 2010, in Wilmington, MA.
The California State Teachers’ Retirement System, which owns more than 199,000 shares of Charles River Laboratories, has a $132 billion portfolio and is the second largest public pension fund in the United States. It administers retirement, disability and survivor benefits for California’s 848,000 public school educators and their families from the state’s 1,400 school districts, county offices of education and community college districts.