Royalty drops hostile bid to buy Elan
ROYALTY Pharma has dropped its multi-billion-dollar hostile bid for Irish drug company Elan and has withdrawn its judicial review.
The bid all but collapsed on Monday after Elan shareholders voted in favour of a share buyback arrangement, scuppering Royalty's plans. The bid was conditional upon shareholders at the Dublin firm rejecting four resolutions put forward by Elan bosses at its EGM.
Yesterday, Royalty announced it was withdrawing its appeal against a ruling by the Irish Takeover Panel that it cannot change the conditions attached to its offer.
This means that the long and often bitter battle has ended, although Royalty may yet still take part in the formal sales process kicked off by Elan last week.
Pablo Legorreta, Royalty chief executive, said it was no longer pursuing the judicial review given "recent developments".
It comes as global investment bankers Jefferies estimated Elan's value at $19 (€14) per share.
The company also named a shortlist of potential suitors, including healthcare company Allergan, biopharmaceutical company Regeneron, pharmaceutical companies Vertex, Alexion and Perrigo, and animal health business Zoetis.
Dublin-based Elan put itself up for sale last week in a last-ditch attempt to fend off the hostile bid by New-York-based Royalty.
Royalty Pharma, which also has headquarters in Dublin, had no comment yet on whether it will participate in the sales process.
The latest increased bid by Royalty offered $13 in cash per share and added a clause known as a contingent value right that could add a further $2.50 per share if blockbuster drug Tysabri hits certain sales milestones.
In an open letter to Elan's board earlier this week, Royalty's chairman Rory Riggs said Royalty lacked confidence that the Elan sale process would be conducted in a fair manner.
"We welcome that you are now contemplating a sale of Elan but urge you to engage with Royalty Pharma today, rather than undertaking a lengthy, and we think likely fruitless, effort to find a buyer willing to offer more than we are," Mr Riggs said.
"We believe Elan's shareholders should view your announcement of a sale process, and the likelihood that any such sale process will yield a better offer than Royalty Pharma's, with some scepticism."
Elan's share price closed up 0.6pc yesterday to €10.14.