US investment firm Royalty Pharma made a firm cash offer for Elan today of up to $12 per share, stepping up its efforts to take control of the Dublin based firm.
In a statement Elan said it noted the offer. The company said its board would “promptly assess the Royalty Pharma announcement and will advise its shareholders accordingly”.
Royalty had earlier made an indicative approach worth $11 per share, which Elan had rejected as a "highly conditional".
Elan struck back by securing strong approval from shareholders last week for a $1 billion share buyback at between $11.25 and $13 a share.
Royalty said today that its cash offer may fall below $12 depending on the price struck in the buyback, which Elan is due to complete this week.
"Royalty Pharma believes Elan Stockholders will welcome the offer, as an alternative to the high risk strategy outlined by Elan's management," the New-York based company said in a statement.
"Elan stockholders should encourage their board to immediately engage with Royalty Pharma with a view to achieving a recommended offer,'' it added.
The buyback, which would return cash to investors after the $3.2 billion sale of its interest in multiple sclerosis drug Tysabri, represents almost 15% of Elan's existing issued share capital.
The Irish Takeover Panel had given Royalty Pharma until May 10 to make a firm offer or walk away.
Royalty Pharma said it would finance the offer through existing resources and new credit facilities.
Elan recently sold its 50% stake in Tysabri to partner Biogen Idec, but continues to receive royalty payments on sales of the drug. Under the Biogen deal, Elan's royalty payments will be 12% of Tysabri sales in the first year, 18% after that, and 25% when annual sales rise above $2 billion.
Sales of the MS drug rose 8% to $1.63 billion last year.
