Elan board rejects sweetened bid from Royalty Pharma


ireland cobblestone_sqThe board of Irish pharmaceutical company Elan has rejected an improved offer of $6.7bn from private equity firm Royalty Pharma.

The company said the offer of $13 per share and a further $2.5 in contingent value rights (CVR) continues to “grossly undervalue” its multiple sclerosis drug Tysabri.

“The value gap between the underlying value of Elan plc and the totality of its business platform and the Royalty Pharma/Echo bid remains significant and the $13 cash and $2.50 CVR structure continues to be wholly inadequate for Elan shareholders,” Elan said in a statement.

In addition, the board urged shareholders to approved four previously announced deals including the acquisitions of Theravance royalties and the AOP Orphan business and the sale of its Alzheimer’s drug ELND005.

Royalty raised the offer from $12 per share on Friday, saying the structure of the new bid was based on feedback from Elan shareholders. The firm told shareholders that the offer will be withdrawn if the approve the recent deals made by Elan, which it said were “desperate attempts to fend off Royalty Pharma’s highly compelling offer.”

A fortnight ago Royalty warned Elan shareholders that the company’s value could drop below $10 per share if the board proceeds with its “incoherent” and “destructive” strategy.

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