When shareholders attack, it’s not just the news that suffers

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 hasworked for the last month to produce is committed to print. It comes from awriter whose story has morphed so materially from its original state that itcan't run as planned—usually leaving a black hole in your layout to be filledat 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 usall. This time, the voice on the other end of the line belonged to our veteranreporter and science guru, Lloyd Dunlap, who delivered the unfortunate newsthat his story about Axela's acquisition of Xceed Molecular was ano-go. In this case, the financing for the deal—which was to take place inCanada, an area especially hard-hit from the economic recession—fell through. Iencouraged 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 thecompanies probably expected, it's still an important one to share with ourreaders.

Financing problems have plagued several similar dealslately, but the real scene-stealer over the last few months has beenshareholders who feel like they are getting the shaft. This summer, manycompanies said "thanks, but no thanks" to acquisition offers, feeling they arenot being valued at their true worth—and keeping our newsroom glued to ourcomputers for updates as fun in the sun passed us by.

In July, mere weeks after Charles River LaboratoriesInternational Inc.'s $1.6 billion bid for Chinese drug developer WuXiPharmaTech Inc. graced our cover, shareholders objected and the merger wascanceled. Topping WuXi shareholders' list of objections were that theacquisition price was "excessive and relies on highly aggressive assumptions tovalue WuXi" and that the claimed revenue synergies were "highly speculative"and the strategic benefits "questionable."

The cover story from our July issue, which reported onCelgene's $3 billion-plus offer for Abraxis BioScience, also hit a snafushortly before press time. Although the deal has cleared regulatory hurdles,Abraxis shareholders have filed a lawsuit alleging that the company's board ofdirectors breached their fiduciary duty for failing to adequately shop for fairoffers and selling Abraxis too cheaply. The final chapter on this melee is yetto be written.

However, at least one shareholder saga recently had a happyending. The tempestuous pas de deux thathas been Novartis' courtship of eye-care company Alcon Inc.—which we have beencovering since April 2008—has birthed a $28.3 billion all-cash deal that givesNovartis a controlling stake in Alcon. Some Alcon shareholders opposed themove, claiming that Novartis offered less per share than it paid to Alcon'sparent company, Nestle, for its stake.

Finally, this month, we are once again rolling the dice onour cover story, which details sanofi-aventis' long-awaited bid for Cambridge,Mass.-based biotech Genzyme Corp. As we went to press, the non-binding offercame in at $18.5 billion, or $69 a share, after several unsuccessful attemptsto reach an agreement with Genzyme. Genzyme promptly refused the offer. Formonths, rumors have swirled that sanofi would pursue a possible hostiletakeover 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 thisstory some more ink. Stay tuned for the next installment in what I am callingthe Shareholder Soap Opera of 2010.