Elan snubs Royalty Pharma takeover advance.
22 April 2013 - Irish biotechnology company Elan Corporation plc (NYSE:ELN) said Monday its board unanimously rejected US investor RP Management LLC's (Royalty Pharma) acquisition bid as considerably undervaluing.
Accordingly, the target's board has recommended that shareholders take no action in relation to the tender offer, which is being carried out via Royalty Pharma unit Echo Pharma Acquisition Ltd.
Royalty Pharma set the price of the offer at USD11.25 (EUR8.63) per share and American depository receipt (ADR), based on the USD11.25 strike price of a USD1bn buyback by the target. The suitor had said its offer would be of up to USD12.00 per share and ADR. The bid, to be funded with available resources and debt, is subject to an acceptance level of 90%, among other conditions.
Elan had said that its board would consider Royalty Pharmaa[euro](tm)s bid, in line with its obligations. It retained Citigroup Inc (NYSE:C), Morgan Stanley (NYSE:MS) and Ondra Partners as financial advisors and A&L Goodbody, and Cadwalader Wickersham and Taft LLP as legal counsels.
Commenting on the rejection of the offer, Elan's chairman Robert Ingram said it was undervaluing the target's current business platform and future prospects.
Elan previously rebuffed Royalty Pharma's indicative proposal of USD11.00 as highly conditional and opportunistic.Country: IrelandSector: BiotechnologyTarget: Elan Corporation plc Buyer: Echo Pharma Acquisition Ltd, RP Management LLC (Royalty Pharma)Type: Corporate acquisitionFinancing: Existing resources, DebtStatus: Bidding