Royalty Pharma raises bid for Elan to potential $8 billion

Fri Jun 7, 2013 3:01pm EDT
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By Padraic Halpin and Jessica Toonkel

DUBLIN/NEW YORK (Reuters) - Royalty Pharma on Friday raised its hostile bid for Irish drug firm Elan to a potential $8 billion, the third increase in five months.

A majority of Elan shareholders have held off tendering their shares in hopes of a bigger pay day.

Royalty is now offering $13 cash per share, up from $12.50 previously, and added a contingent value right (CVR) clause that could mean an additional $2.50 per share if Elan's blockbuster multiple sclerosis drug Tysabri hits certain sales milestones.

Institutional investors collectively holding 5 to 10 percent of Elan told Reuters they would approve the new Royalty Pharma bid, but said they do not think this was the suitor's final offer.

"The best thing I like about this offer is that it doesn't say 'best and final,'" said one shareholder.

Elan's board said on Friday it would assess Royalty Pharma's offer "in line with its obligations under Irish takeover law," and advised shareholders to take no action on the bid in the meantime.

Royalty Pharma declined to comment on whether it was prepared to increase its bid again.

WHITE KNIGHT?   Continued...