Elan's competence questioned by former board member

Wednesday 12 June 2013 07.40
Former Elan board member writes open letter to Financial Times
Former Elan board member writes open letter to Financial Times

A former board member of Elan has questioned the experience and competence of the company's management and claims its proposed transactions are "value destructive".

In a letter in today's Financial Times, Jack Schuler said that in his view, Elan's board and management has very limited experience in doing deals and that he believes it is not competent to run a business.

He said he has no confidence that Elan CEO Kelly Martin or the other Elan board members will act in the interests of shareholders.

This comes as Royalty Pharma has accused Elan of misleading shareholders over voting procedures crucial to its $6.7 billion hostile bid, ahead of a deadline to approve a series of alternative transactions by Elan.

The US-based private equity company claims Elan has misinformed holders of its US depository shares of the deadline by which they would need to register in order to vote for a series of transactions that would undermine Royalty's bid.

If a majority of Elan's voting shareholders approve the company's planned debt issue and deals including the purchase of future royalties in US respiratory specialist Theravance, they will undermine Royalty's plans to buy Elan for $13 a share, plus a contingent value right of up to $2.50.

Elan has rejected Royalty's bid as "wholly inadequate" and hinted at alternative bidders by saying it had instructed its advisers to examine "several unsolicited corporate enquiries".