Royalty Pharma Once Again Increases Its Bid For Elan

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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 Pharma Once Again Increases Its Bid For Elan

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.

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