The 5 Dumbest Things on Wall Street This Week: June 21
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!
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV