Royalty warns of job cuts if Elan bid accepted
Published 05/05/2013 | 05:00
New York investment firm Royalty Pharma has warned there could be job cuts in the Irish drug firm Elan if Royalty is successful in its €4.3bn takeover bid for the company.
Royalty Pharma said last week it would review the Irish drugmaker's operations if its multi-billion dollar offer is accepted.
"It is Royalty Pharma's expectation that its review may result in a reduction in employee headcount at Elan over time," says Royalty in its offer document. "Until such a review occurs, Royalty cannot be certain what repercussions there will be on management and employees of the combined group, or the location of Elan's places of business or any redeployment of Elan's assets."
The offer document also states that "nominees of Royalty Pharma" will be appointed to the board of Elan should the offer be accepted and "accordingly, there will be a rationalisation of the Elan board at that time".
Elan shareholders have until the end of the month to accept the offer. Elan's board, which includes CEO Kelly Martin, has already rejected the bid. In a statement last month, Elan said: "The offer from Royalty grossly undervalues Elan's current business platform and future prospects. As a result the board unanimously and without reservation rejected the offer."
It also emerged last week that Elan considered buying Royalty Pharma last year.