Drugmaker Perrigo to buy Ireland's Elan for $8.6 billion
By Padraic Halpin and Sam Cage
DUBLIN (Reuters) - U.S. drugmaker Perrigo (PRGO.N: Quote) agreed to buy Elan ELN.I for $8.6 billion in a deal that will hand it tax savings from being domiciled in Ireland and royalties from a blockbuster multiple sclerosis treatment.
The deal, agreed on Monday, ends a bitter takeover battle in which Elan rejected three lower bids from U.S. investment firm Royalty Pharma ROYPH.UL amid injunctions, court hearings and a war of words before putting itself up for sale last month.
Michigan-based Perrigo, which makes over-the-counter pharmaceuticals for the in-store brand market and has a market value of some $12 billion, will pay $6.25 per share in cash plus $10.25 per share in stock, a premium of about 10.5 percent over Elan's closing price on Friday.
Elan ELN.N shares rose 3.8 percent on Monday to $15.5, close to a bid that analysts expect will be snapped up by shareholders who rejected Royalty's successive overtures. Perrigo shares dropped 6.7 percent to $125.3
"Elan has uncovered an excellent offer for its shareholders, substantially ahead of the level Royalty Pharma could achieve," Berenberg Biotech analysts said in a note to clients.
For Elan and Chief Executive Kelly Martin, who took over the firm in 2003 when its share price had sunk to $2, the Perrigo deal is vindication for rejecting Royalty's advances.
Martin, a low-key former Merrill Lynch banker, took a series of verbal attacks in a four-month saga that frequently turned ugly.
In an open letter to the Elan board last month, Royalty predicted that Elan was embarking on a lengthy and likely fruitless effort to find a buyer willing to better its offer. Continued...