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Last Update: 25-Feb-13 07:47 ET
Elan shares spike 8% following buyout proposal for $11/share
Elan (ELN $11.50 +0.90): RP Management announced that contact was made on Monday February 18, 2013 with the Chairman of Elan, followed by a meeting then taking place on Wednesday February 20, 2013, at which an indicative proposal was made to acquire the entire issued and to be issued share capital of Elan. Royalty Pharma is proposing, on an indicative basis, to make an offer for Elan of $11 for every Elan Share and every Elan ADS. While Royalty Pharma has not received a formal response to its Proposal and has been unsuccessful in its efforts to engage with Elan since making the Proposal, Royalty Pharma remains committed to working towards a recommended transaction. Royalty Pharma was, however, surprised by Elan's public announcement on Friday February 22, 2013 discussing Elan's standalone strategy but not addressing the fact that Elan had received Royalty Pharma's Proposal. Royalty Pharma's Proposal offers Elan Shareholders a simple and clear choice: Remain an investor in a company whose material assets, following the completion of the Tysabri Transaction, will consist of cash and the Tysabri Royalty while Elan's management pursues its announced strategy which includes maintaining expected operating expenses in the range of $170-190 million in the 2013 financial year and investing in a variety of yet-to-be-disclosed business assets; or Sell their Elan Stock for a cash amount that Royalty Pharma believes reflects the full value of Elan. Royalty Pharma believes that the risks and lack of earnings visibility associated with Elan's acquisition and in-licensing strategy are substantial.
