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TheStreet Open House

Royalty Pharma Announces Firm Offer To Acquire Elan

Stocks in this article: ELN

NEW YORK, April 15, 2013 /PRNewswire/ -- Echo Pharma Acquisition Limited ("Royalty Pharma") today announced, pursuant to Rule 2.5 of the Irish Takeover Rules (the "Announcement"), the terms of a firm, all cash offer (the "Offer") for the entire issued and to be issued share capital of Elan Corporation, plc ("Elan") (NYSE: ELN).  Subject to certain conditions as set forth in the Announcement, Royalty Pharma is offering the "Offer Price" for each outstanding share and ADS of Elan (each, an "Elan Share"):

  • US$12.00, if the strike price for Elan's previously announced Dutch Auction (the "Dutch Auction Strike Price") is US$11.75 or US$12.00;
  • US$11.50 if the Dutch Auction Strike Price is US$11.50;
  • US$11.25 if the Dutch Auction Strike Price is US$11.25; and
  • US$11.00 per Elan Share if (1) the Dutch Auction Strike Price is equal to or greater than US$12.25 and less than or equal to US$13.00, or (2) upon the occurrence of certain other events as set forth in the Announcement.

If Elan confirms its net cash position on the terms set forth in the Announcement, the Offer Price will be paid in cash.  However, if Elan fails to do so, the initial cash component will be US$1.00 less and holders of Elan Shares will be issued a right to receive up to US$1.00 in cash based on Elan's net cash position.  The terms and conditions of the Offer are set forth in detail in the Announcement.  

Commenting on the Offer, Pablo Legorreta, Founder and Chief Executive Officer of Royalty Pharma said: "This announcement demonstrates our commitment to providing a full and fair offer to Elan's shareholders.  We believe that Elan's shareholders will welcome this fully financed cash Offer.

"Elan today consists of cash and a royalty on Tysabri.  Royalty Pharma has over 15 years of experience valuing royalties on pharmaceutical products.  Based on our analysis of Elan's Tysabri royalty and the implied valuation of Elan's economics in Tysabri reflected in Elan's recent transaction with Biogen, we believe that our Offer represents a full and fair value for Elan.  We remain hopeful that the Board of Elan will consider our Offer and recommend it to its shareholders.  In order to obtain the full amount of our Offer in cash in the shortest time frame, Elan's shareholders should encourage Elan's board to engage immediately with Royalty Pharma."

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