Royalty bid for Irish drugmaker Elan in trouble
US pharmaceutical investor says it does not appear to have backing of Elan shareholders
Royalty Pharma says Elan shareholders are set to back one of four resolutions being voted on ahead of a meeting on Monday, a result that would make its bid for the company null and void.
Citing a review it had undertaken of voters, Royalty said Elan shareholders were set to back one of four resolutions being voted on ahead of a meeting on Monday, a result that would make its bid for the company null and void.
Royalty, which had a third increased bid rejected by Elan’s board this week, has made its offer contingent on Elan shareholders rejecting resolutions at the meeting, to try to stop it finalising a series of defensive acquisitions.
The US investment firm claimed that after 70 per cent of Elan’s US shareholders had lodged their response ahead of a deadline later today, it believed the vote on a €200 million share buyback would be approved.
The majority of Elan’s shares are held in the US.
Royalty said it believed that the proposal could still be voted down if a few shareholders changed their vote and that it was in active dialogue with those who had voted.
Royalty tried to change the conditions attached to the bid last week after Elan said only two of the four resolutions concerned its acquisitions. But Ireland’s Takeover Panel ruled Royalty could not revise the terms of its offer.
The New York-based company is due in Irish court later today to seek to have an appeal heard next week against the Irish Takeover Board’s decision as it scrambles to stay in a battle that has turned increasingly bitter.
If Royalty is forced to withdraw its bid after Monday’s vote, it would be prevented from making another unsolicited offer for 12 months under Irish takeover rules.
Its latest bid offers $13 in cash per share - compared with a previous $12.50. The latest bid added a clause known as a contingent value right (CVR) that could add a further $2.50 per share if blockbuster drug Tysabri hits certain sales milestones.