On The Block

VaxGen Inc. has not found the cure to its problems and its most recent efforts met with stronger-than-expected opposition from shareholders. One of the company’s largest shareholders blocked VaxGen’s proposed merger with privately held Raven Biotechnologies Inc. because it believed the transaction was not in stockholders’ best interests. VaxGen’s board plans to assess strategic alternatives including the San Francisco-based company’s liquidation. VaxGen has restructured its operations several times and has cut 89 percent of its staff since the U.S. government terminated its anthrax vaccine supply contract in December 2006.

The subprime mortgages has snared another vicitm. Cleveland bank National City Corp.’s (NYSE: NCC) board is mulling over strategic alternatives with adviser Goldman Sachs, including possible sales to rivals Key Bank and Fifth Third Bank. LBO shop Kohlberg Kravis Roberts & Co. is also rumored to have contemplated a strategic investment in National City. The company operates a network of banks primarily in the Midwest and ran up a sizeable exposure to subprime mortgages. For the fourth quarter ended Dec. 31, National City swung to a loss of $333 million, partly due to a $691 million provision for credit losses.

Landry’s Restaurants Inc. (NYSE: LNY) hired Cowen & Co. as to help the company review strategic alternatives. A special committee has been assigned to determine if a sale of the Houston-based company is in the best interests of Landry’s and shareholders. It will consider the acquisition proposal from Landry’s Chairman, President and Chief Executive Tilman J. Fertitta, who offered to acquire the remaining shares he does not already own in the restaurant, hotel and casino company for $23.50 a share. The special committee will also review any alternative proposals that may be received.

Looking to fuel shareholder value, Welton Energy Corp.’s board hired Tristone Capital Inc. as a financial adviser to assist in the exploration of strategic alternatives. The options under review may include the sale of the company, a merger, reorganization, or other transaction. Welton Energy is focused on the exploration, development and production of oil and natural gas in Alberta, Saskatchewan and British Columbia, Canada. A special committee has been formed to oversee the process, which Welton Energy is pursuing because of the disparity between asset value and the company’s stock price on the Toronto Stock Exchange.