Irish biotech group Elan puts itself on the block after advising against hostile bid from RP Management

Irish biotechnology firm Elan Corp plc (NYSE:ELN) said it was launching a formal sale given expressions of interest it had received and would invite hostile suitor RP Management LLC (Royalty Pharma) to take part in the process.

Elan also once again advised against acceptance of the US investor’s bid, which is subject to the target’s shareholders rejecting four proposed defensive deals at a meeting set for today.

Royalty Pharma is carrying out the bid, which runs until 24 June, via unit Echo Pharma Acquisition Ltd. In addition to the proposed per-share cash price of USD13.00 (EUR9.75), Elan’s shareholders are offered also one contingent value right worth up to USD2.50 a share, which gives the bid a potential total value of USD8bn, according to Reuters. The US firm has said it would use available resources and debt to finance the transaction.

Royalty Pharma said last Friday, it estimates, based on votes already cast, that only one of the four resolutions – a stock buyback programme – had majority backing, which, however, was slim and could be overturned following the ordinary stockholders’ vote.

The suitor was granted last Thursday court injunction in Ireland, allowing it to appeal the country’s takeover watchdog’s denial of its request not to be required to withdraw its hostile bid if any of the ELND005 transaction or the stock buyback programme subject to the shareholder vote is approved. The court is to meet again Wednesday. If the Irish Takeover Panel’s ruling remains in force, the suitor will have to lapse its offer if any of the four defensive deals wins Elan’s shareholders’ backing.

Elan is being advised by Citigroup Inc (NYSE:C), Davy Corporate Finance Ltd, Morgan Stanley (NYSE:MS), Ondra Partners, A&L Goodbody and Cadwalader Wickersham and Taft LLP.