5. Elan Insanity
Enough with the fun and games Elan (ELN)! Now that you've summarily dismissed Royalty Pharma as a mate, it's time to stop acting like a royal pain in the ass and select your own suitor.
U.S.-based Royalty Pharma withdrew its appeal against a ruling by Ireland's regulator on takeovers Tuesday, which means its $8 billion hostile offer for Elan automatically lapses. As a result, Elan, which put itself up for sale last week, is free to shop itself after fending off Royalty's overtures for the past four months.
According to Irish Takeover Panel rules, Royalty is not allowed to pursue another hostile bid for Elan for 12 months now that its previous offer has elapsed. For its part, Elan has publicly stated that Royalty can take part in the sale process, although Royalty has not announced plans to do so yet.Let's just stop here for a quick second. Is it just us, or are the guidelines for simply buying a company in Ireland absolutely bewildering? Seriously, even James Joyce's Ulysses is less confusing than all the rules and regulations at play here. And at least for that Irish classic you could refer to the Cliffs Notes when Leopold Bloom left you lost on the streets of Dublin. Unfortunately, there is no such guidebook when it comes to the Irish Takeover Panel. For simplicity's sake, we won't even get into all the rejected resolutions and shareholder votes which got us to this point. We will, however, continue to wonder what Elan CEO Kelly Martin has in mind for the company now that he has spurned Royalty's third and latest bid of $13 in cash, plus a "contingent value right" that could add another $2.50 per share if its multiple sclerosis drug Tysabri hits certain sales milestones. Elan reportedly has other interested parties and rumors abound about a Forest Labs (FRX) bid, yet we've only been seeing Royalty bid against itself up to this juncture. If Martin has a so-called "White Knight" lined up, we'd love to finally see who it is. For that matter, we're sure all the institutional shareholders that were satisfied with Royalty's last bid would also like some clarity now that it's off the table. Think about it. If we're going crazy, then Martin's lack of guidance must be driving them straight to the Guinness!
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