18 June 2013

Royalty bid for Elan rests on court ruling

Irish drug company Elan's fate is up in the air as US company Royalty Pharma's hostile bid depends on a legal decision.

By Julia Duke

Dublin: pharma deal hinges on court decision

Royalty must convince Elan shareholders to accept the £5.1bn bid dependent on the shareholders voting down all propositions.

Bid offer

Elan investors rejected the company’s $1bn royalties deal with US-based Theravance, the acquisition of private drug firm AOP Orphan, and a drug subsidiary spin-off, Reuters reports.
The shareholders, however, approved a $200m share buy-back that could make Royalty increase its bid offer or turn their back on the deal.

The hearing

Last week, Royalty won against the Irish takeover panel that said it couldn’t change the terms to avoid the bid collapse. Royalty says it meant its conditionality to apply to only the two resolutions relating to acquisitions. The hearing to determine whether it can appeal is scheduled for tomorrow.
After initial rejections and altering the bid, Royalty’s offer stands at $13 a share with another $2.50 if Tysabri hits its sales goals.
The drug company that put itself up for sale on Friday has a week to decide whether or not to accept the offer, according to the report.

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