LONDON - Elan’s battle to fend off a hostile bid by Royalty Pharma of the United States took a new turn on Friday when the Irish drug company decided to put itself up for sale.
The step comes four months after Royalty Pharma first made an offer for Elan, challenging the company’s stand-alone strategy. Royalty Pharma earlier this month sweetened its hostile takeover offer for Elan for a second time to $13 for each Elan share and an option to receive as much as $2.50 a share extra. Elan rejected the offer as too low.
But on Friday Elan said that it would now put itself up for sale “in light of the expressions of interest received to date†and that “Royalty Pharma will be invited to participate if they so wish.â€
“Elan board and management are aligned in maximizing the full value potential of the business on behalf of its shareholders,†Elan said in a statement. “We will update the market as appropriate.â€
Royalty Pharma’s current offer for Elan, which Elan said its shareholders should reject, values the company at $6.7 billion, or $8 billion including the options. Royalty Pharma increased its offer after only 7.5 percent of Elan’s shareholders accepted the earlier proposal.
Elan shareholders are scheduled to gather for an extraordinary shareholder meeting on Monday to vote on four acquisitions that Elan negotiated after Royalty Pharma’s initial approach. Royalty Pharma has been critical of the value of the transactions and said its offer for Elan would lapse if Elan shareholders approved the transactions.
Citigroup, Davy Corporate Finance, Morgan Stanley and Ondra Partners are advising Elan on the decision. A&L Goodbody and Cadwalader, Wickersham & Taft are providing legal advice.
