ROYALTY Pharma, which is pursuing a hostile $8bn (£5.1bn) takeover of Irish drugmaker Elan, moved late on Tuesday night to make sure it is not blocked by a potential $200m share buyback and drug spinoff at the target company.
Elan, which has been resisting the advances of the US investment firm for more than three months, rejected a sweetened takeover offer on Monday and said for the first time that it was assessing inquiries from other parties.
Royalty’s new bid of $13 cash per share, plus an extra $2.50 depending on sales of the multiple sclerosis drug Tysabri, is contingent on Elan shareholders rejecting a series of four defensive transactions. The four proposals will be put to a vote of Elan shareholders at a meeting next Monday.
Royalty sought a ruling from the Irish Takeover Panel confirming that it would not be obliged to drop out if all four proposals were approved. The panel issued a ruling last week that will make Royalty’s bid null and void if Elan shareholders approve either the share buyback or the drug spin-off.
“Royalty Pharma today announces that it has reluctantly filed judicial review proceedings related to the decision of the Irish Takeover Panel,” the suitor said in a statement.
“Royalty is concerned that the Irish Takeover Panel's decision will deprive Elan shareholders of the opportunity to consider Royalty Pharma’s further increased offer.”
Elan shareholders will also vote on a $1bn deal to buy 21 per cent of the royalties Theravance receives from GlaxoSmithKline, and the $340m acquisition of AOP Orphan, an Austrian company that focuses on rare diseases. Royalty has urged Elan shareholders to reject all four proposals.
In a letter to shareholders made public on Tuesday, Elan reiterated that Royalty’s offer was grossly inadequate.
City A.M. Reporter