Skip to main content

UPDATE 2-Royalty ups Elan bid and issues shareholder ultimatum

Royalty Pharma raised its hostile bid for Elan to $12.50 per share and threatened to withdraw the bid if Elan shareholders approve a series of defensive transactions announced by the Irish drug firm.

 

Royalty Pharma, which buys royalty streams of patented drugs, said Elan's efforts to reinvent itself through a series of acquisitions and debt deals were hasty and ill-conceived.

Royalty's new bid for Elan values the company at around $6.4 billion and comes in the face of Elan's insistence that it is worth more. Royalty previously offered $11.25 a share

Elan rejected the initial bid, described as a "nuisance," and stressed that it is determined to keep its independence.

The Dublin-based company said in a statement that its board would assess the new Royalty Pharma offer but "strongly advised" shareholders to take no action on the bid at this time.

Earlier Monday Elan announced its second major drug deal in less than a week.

Royalty said its new, all-cash offer was conditional on Elan shareholders voting against the acquisitions at a special shareholder meeting set for June 17.

Royalty said Elan "dramatically overpaid" last week when it agreed to pay $1 billion for buy 21 percent of the royalties that U.S. company Theravance receives from GlaxoSmithKline.

Royalty said its takeover offer "represents 100 percent liquidity for Elan stockholders today, which Royalty Pharma believes is a far superior alternative to Elan's high-risk strategy of hastily arranged and value-destructive acquisitions."

It added, "If the Theravance transaction and the other transactions announced today serve as a template, Royalty Pharma believes Elan stockholders should be very concerned about future value destruction and undue risk-taking by Elan."

Royalty also contends that Elan's board has "compromised its ability to freely advise Elan shareholders" because according to the Theravance deal, the board is not allowed to recommend Royalty Pharma's offer at any price without breaching that agreement.

"Royalty Pharma believes it is highly irresponsible and 'off-market' to agree to such provisions," the firm said in a statement announcing its sweetened offer.

Elan sold its 50 percent interest in Tysabri, a multiple sclerosis drug, to U.S. partner Biogen Idec in February for $3.25 billion plus royalties of up to 25 percent, and used the proceeds to reward investors through a share buyback and to plot its spending spree.

_0">

Royalty also said on Monday that it reserved the right to reduce the acceptance threshold for its increased offer to 50 percent plus one Elan share from 90 percent previously.

Elan shares in New York, up more than 10 percent since Royalty's first approach in February, were up 3 percent to $12.04 in afternoon trading.

In a string of deals over the past few days, Elan has basically transformed itself into a specialty pharma roll-up of companies from around the world, said Michael Yee, an analyst with RBC Capital Markets.

Now it is up to shareholders to decide if they want to take the risk of letting management try to execute this strategy, he said.

_4">

"The company has limited experience in acquiring, consolidating and executing on products in the last five years," Yee said. "That is why it could be risky."

_5">

_6">

Popular posts from this blog

Study Abroad USA, College of Charleston, Popular Courses, Alumni

Thinking for Study Abroad USA. School of Charleston, the wonderful grounds is situated in the actual middle of a verifiable city - Charleston. Get snatched up by the wonderful and customary engineering, beautiful pathways, or look at the advanced steel and glass building which houses the School of Business. The grounds additionally gives students simple admittance to a few major tech organizations like Amazon's CreateSpace, Google, TwitPic, and so on. The school offers students nearby as well as off-grounds convenience going from completely outfitted home lobbies to memorable homes. It is prepared to offer different types of assistance and facilities like clubs, associations, sporting exercises, support administrations, etc. To put it plainly, the school grounds is rising with energy and there will never be a dull second for students at the College of Charleston. Concentrate on Abroad USA is improving and remunerating for your future. The energetic grounds likewise houses various

Best MBA Online Colleges in the USA

“Opportunities never open, instead we create them for us”. Beginning with this amazing saying, let’s unbox today’s knowledge. Love Business and marketing? Want to make a high-paid career in business administration? Well, if yes, then mate, we have got you something amazing to do!   We all imagine an effortless future with a cozy house and a laptop. Well, well! You can make this happen. Today, with this guide, we will be exploring some of the top-notch online MBA universities and institutes in the USA. Let’s get started! Why learn Online MBA from the USA? Access to More Options This online era has given a second chance to children who want to reflect on their careers while managing their hectic schedules. In this, the internet has played a very crucial in rejuvenating schools, institutes, and colleges to give the best education to students across the globe. Graduating with Less Debt Regular classes from high reputed institutes often charge heavy tuition fees. However onl

Sickening moment maskless 'Karen' COUGHS in the face of grocery store customer, then claims she doesn't have to wear a mask because she 'isn't sick'

A woman was captured on camera following a customer through a supermarket as she coughs on her after claiming she does not need a mask because she is not sick.  Video of the incident, which has garnered hundreds of thousands of views on Twitter alone, allegedly took place in a Su per Saver in Lincoln, Nebraska according to Twitter user @davenewworld_2. In it, an unidentified woman was captured dramatically coughing as she smiles saying 'Excuse me! I'm coming through' in the direction of the customer recording her. Scroll down for video An unidentified woman was captured dramatically coughing as she smiles saying 'Excuse me! I'm coming through' in the direction of a woman recording her A woman was captured on camera following a customer as she coughs on her in a supermarket without a mask on claiming she does not need one because she is not sick @chaiteabugz #karen #covid #karens #karensgonewild #karensalert #masks we were just wearing a mask at the store. ¿ o