LONDON - RP Management on Monday proposed to buy the Elan Corporation of Ireland for $6.6 billion, in an attempt to scuttle the stand-alone strategy outlined by the drug maker.
Under a preliminary offer, RP Management, or Royalty Pharma, disclosed an $11-a-share bid for Elan. The proposal represents a 6.3 percent premium to Elan’s closing price on Feb. 15, just before Royalty Pharma initially reached out to company’s management about a deal.
Royalty Pharma, which invests in royalties of pharmaceutical products, is taking aim at Elan’s new deal-making plan.
Earlier this month, Elan sold its stake in the blockbuster multiple sclerosis drug Tysabri for $3.25 billion. Elan’s management said it planned to use part of the proceeds for acquisitions.
But Royalty Pharma contends that a takeover would be more beneficial to shareholders, given Elan’s limited record with “acquisitions or in-licensed products,†the firm said in a regulatory filing. The industry, Royalty Pharma claims, is highly competitive, which could make it difficult for Elan to successfully navigate.
‘‘Royalty Pharma believes that good assets in the pharmaceutical industry are in short supply, that there will therefore be significant competition for these assets, and that this competition is likely to result in acquirers being required to pay significant premiums to acquire these assets,’’ the company said.
Royalty Pharma said it first contacted the chairman of Elan on Feb. 18, making a preliminary offer two days later. The company said Elan had not formally responded to the proposal and more recent efforts to discuss the bid h! ad been unsuccessful.
‘‘Royalty Pharma remains committed to working towards a recommended transaction,’’ the company said. Royalty Pharma suggested paying $11 for every Elan share, which it said represented ‘‘the full value of Elan today.’’
Royalty Pharma plans to finance the bid with cash and debt. The company, which currently has access to $1 billion in cash, is working with JPMorgan Chase and Bank of America Merrill Lynch to arrange the necessary financing.
Elan did notimmediately respond to a request for a comment.
