Ebb & Flow

VaxGen and oncology company Raven caved under the weight of shareholder disapproval last week and terminated their merger plans.

The deal had been scheduled for a shareholder vote on Friday, but was pulled due to stronger than anticipated opposition. VaxGen said it believed the merger would have been defeated.

VaxGen's board will immediately assess strategic alternatives, including a possible liquidation. The company already has restructured three times since losing an HHS contract for its rPA102 anthrax vaccine in December 2006.

The week before the scheduled vote, investor MedCap issued a statement critical of the merger, specifically saying that Raven is too early stage, VaxGen's management had not adequately conserved cash and that given the falling share price there is a lack of momentum for the transaction. At March 19, the firm held about 4.8% of VaxGen (NASDAQ:VXGN).

MedCap had urged shareholders to vote against the merger because of "the possibility of receiving higher liquidation proceeds than the current stock price." It cited a $1.35 per share value for a liquidation, which it said was "low" but nonetheless a significant premium to the share price.

VaxGen responded with

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