Tuesday, January 25, 2011

"The More They Stay The Same. . ." | Ex-SP CFO Bertolini, To Another Board Seat

Truly, I mean no offense to the fine people at Charles River Labs, but it does seem quite appropriate -- that Mr. Bertolini is now overseeing a vast labyrinth of. . . lab rats.

More seriously, and actually, more germane to Mr. Bertolini's career, post Schering-Plough, is the notion that the investors are here lobbying for a "liquidity event."

I am thinking here, about the latest on Genzyme/Sanofi -- where Bob also holds a seat -- right? It is no coincidence that Relational Investors holds a big stake in Genzyme. . . and also holds a large stake in Charles River Labs (over 6 percent of all outstanding shares). Now Bob Bertolini is their guy, on both boards. Will he get the Audit Committee chair here, too -- as he has at Genzyme? We'll see.

In any event, here is a bit of the Wall Street Journal's rundown, and perspective -- do go read it all:

. . . .Pharmaceutical research firm Charles River Laboratories International Inc. is replacing two board members after facing pressure from investors critical of the company's capital-allocation plans.

Robert Bertolini, former chief financial officer of Schering-Plough Corp. and a board member at Genzyme Corp., and Richard Wallman, former CFO of Honeywell International, will become Charles River board members. . . .

Charles River consulted on the new directors with hedge fund Jana Partners LLC, the company's biggest shareholder with about an 8.5% stake, and investment fund Relational Investors LLC, which has about a 6% stake. Both investors want Charles River to improve the way it spends the company's capital after expansion plans faltered.

Jana and Relational opposed Wilmington, Mass.-based Charles River's $1.6 billion deal to buy China's WuXi PharmaTech last year. Because of investor opposition, the companies terminated their agreement and Charles River had to pay a breakup fee of $30 million to WuXi. The company also announced a $500 million stock repurchase program.

Shareholders believed Charles River was paying too much for the Chinese company, and that there were high execution and integration risks. . . .

We will keep you posted, but it seems that Bob "The Sandman" Bertolini is collecting board seats where a bust-up or take-out is the larger institutional investors' chief goal (again, look at Genzyme/Sanofi and Ralph Whitworth's Relational Investors, here).

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