The challenge to Charles River Laboratories International Inc.’s plan to buy a Chinese drugmaker heated up yesterday as Charles River’s largest shareholder cited research data suggesting the Wilmington company should instead consider splitting up or putting itself up for sale.
Another obstacle to the $1.6 billion deal emerged as the Federal Trade Commission, which monitors anticompetitive behavior, asked for more information about the proposed purchase of WuXi PharmaTech Inc. But, in an endorsement of the acquisition, a proxy advisory firm recommended that investors approve the deal. A shareholder vote is set for Aug. 5.
The flurry of activity, following a Charles River presentation Tuesday urging support for the merger, underscored how what once had looked like a routine transaction has become another test of wills between a company’s management and a band of activist stockowners. Two Massachusetts biotechnology companies, Genzyme Corp. and Biogen Idec Inc., found themselves embroiled in similar disputes this year.
Charles River believes WuXi will catapult it into the ranks of the top global life sciences players by enabling it to offer customers a broader range of services. Opponents, including the two largest Charles River stockowners, argue that the price is too high and that the promised benefits of the deal are questionable.
In a letter to Charles River’s chief executive, James C. Foster, the head of New York hedge fund JANA Partners LLC, which owns more than 7 percent of the company, offered a fresh critique yesterday of the agreement to buy WuXi (pronounced woo-shee).
JANA managing partner Barry Rosenstein contended that “other avenues for creating shareholder value are far more promising.’’ Among them, he wrote, are buying back stock, selling the company outright, or splitting itself into two separate businesses — one focused on breeding and supplying lab animals for biomedical research, the other on providing preclinical services for biopharmaceutical clients.
Citing a recent Lazard Capital Markets research report, he said a breakup could boost Charles River shares by about 30 percent. Shares fell 83 cents to close at $34.12 on the New York Stock Exchange yesterday, about a 2.4 percent decline.
“We’re trying to make the point that there’s far more certain ways to generate substantially greater value for shareholders’’ than the acquisition of WuXi, a spokesman for JANA said.
Charles River executives declined to comment on the alternative proposals outlined in yesterday’s letter from Rosenstein, his third since JANA’s attempt to derail the takeover became public early last month. In a Tuesday interview, Foster noted that JANA took its stake in Charles River only after the agreement to purchase WuXi was disclosed on April 26. “This is not a long-term shareholder who understands the company and is concerned about it,’’ he said.‹
Market Data 
Markets 
AI
