The Irish drug maker announced Friday a formal sales process to find a buyer for the company -- an acknowledgement that management's restructuring plan is likely to be rejected by shareholders on Monday.
Elan "invited" Royalty Pharma to participate in the sale process, even though Royalty's hostile tender offer of up to $15.50 per share for the company is still in play. Elan urged its shareholders not to accept Royalty's tender in the hope that another acquirer might step in with a higher price.
That seems unlikely. Any other company interested in acquiring Elan would have stepped up by now.Under Irish takeover law, Royalty's tender offer may be invalidated if Elan shareholders approve any one of four company proposals to restructure the company. The outcome of the shareholder vote will be announced Monday but so far, it seems as if only one of the proposals -- a share repurchase plan -- had a chance of passing. Royalty has gone to court seeking to amend the terms of the Elan tender offer to allow its takeover attempt to remain in play even if shareholders voted for one of the company's restructuring proposals. Elan shares rose 9 percent to $13.78 in early trading. -- Reported by Adam Feuerstein in Boston. Follow Adam Feuerstein on Twitter.