U.S. pharmaceutical investor Royalty Management LLC (Royalty Pharma) has once again increased its offer to acquire the Irish drugmaker Elan Corporation, plc (NYSE:ELN), reports Bloomberg. Royalty Pharma said it will now pay $12.50 per American share of Elan Corporation, plc (NYSE:ELN), citing a number of acquisitions the drugmaker made recently to bolster its sales and resist the takeover bid.
Royalty’s Previous Offers
Royalty Pharma made its first offer of $11 per Elan Corporation, plc (NYSE:ELN) share in February this year. But the pharmaceutical company’s board immediately rejected the offer and announced a $1 billion share buyback program. Unwilling to give up, Royalty Pharma raised its bid to $12 per share in April, but that too was rejected by Elan Corporation, plc’s board. The latest offer values the drugmaker at about $6.4 billion, compared to its current market value of $6.18 billion. Royalty Pharma said its latest offer represents a 45 percent to Elan Corporation, plc’s enterprise value.
Royalty Pharma said that Elan Corporation, plc (NYSE:ELN) CEO Kelly Martin’s strategy to reinvest the $3.25 billion the company received from Biogen Idec Inc. (NASDAQ:BIIB) by selling its stake in multiple sclerosis drug Tysabri is a big risk to the company and its shareholders. An acquisition will avoid this substantial risk.
Elan On Acquisition Spree
Over the last few weeks, Elan Corporation, plc (NYSE:ELN) acquired a 48 percent stake in Dubai-based NewBridge Pharmaceuticals for $40 million, acquired Austrian company AOP Orphan Pharmaceuticals AG for $340 million, and invested $1 billion Theravance Inc (NASDAQ:THRX)’s royalties. Morgan Stanley (NYSE:MS), Davy Corporate Finance, Citigroup Inc (NYSE:C) and Ondra Partners are advising Elan Corporation, plc (NYSE:ELN). Royalty Pharma’s advisers include JPMorgan Chase & Co. (NYSE:JPM), Groton Partners and Bank of America Corp (NYSE:BAC).
Royalty pharma said that its offer included $4.6 billion for the Irish drugmaker’s Tysabri royalty. That’s a 43 percent premium over $3.25 billion that Biogen Idec Inc. (NASDAQ:BIIB) paid it for half of its interest in Tysabri. However, the Pablo Legorreta led investment firm clarified that the latest offer has a condition that Elan Corporation shareholders vote against the $1 billion royalties deal with Theravance Inc (NASDAQ:THRX).
American shares of Elan Corporation, plc (NYSE:ELN) soared 3.68 percent to $12.10 at 1:19 PM EDT.