Elan Rises on Revised Unit Sale

King Pharmaceuticals drops a lawsuit and agrees to a reduced price.
By TSC Staff ,

Elan Corp.

(ELN)

was firming in the premarket session after the company restructured the sale of its U.S. primary care business to

King Pharmaceuticals

(KG)

.

Under the revision, King will deposit $400 million in escrow ahead of the closing, and then acquire the unit for a total of $750 million, a price that covers the $40 million in inventory. The purchase price is about $100 million less in the revised pact.

The agreement will suspend a lawsuit filed by King to get out of the acquisition after the U.S. government began a probe into Elan's sleep aid Skelaxin. The probe was later dropped.

Elan shares were up about 71 cents, or 17%, to $4.95 on the Instinet premarket session.

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