BioCentury
ARTICLE | Top Story

Royalty ups bid as Elan unveils deals

May 21, 2013 12:23 AM UTC

Royalty Pharma (New York, N.Y.) raised its offer to acquire Elan Corp. plc (NYSE:ELN) on Monday shortly after Elan announced a flurry of proposed moves, including two proposed acquisitions, a spinout, a share buyback and an $800 million note deal. Royalty increased its bid to $12.50 per share from $11.25, valuing Elan at $6.4 billion. The bid is contingent on Elan shareholders rejecting the proposal to acquire rare disease company AOP Orphan Pharmaceuticals AG (Vienna, Austria), as well as this month's proposed deal to pay Theravance Inc. (NASDAQ:THRX) $1 billion in cash in exchange for a 21% interest in the royalties Theravance is eligible to receive from partner GlaxoSmithKline plc (LSE:GSK; NYSE:GSK) for four respiratory programs (see BioCentury, May 20).

Elan plans to raise the $800 million through the sale of senior notes due 2021, and said it will repurchase $200 million in shares under a new buyback program. Elan also proposed to acquire a 48% stake in NewBridge Pharmaceuticals Ltd. (Dubai, UAE). It also plans to spin out ELND005 into a newco (see below). Elan expects to have about $1.2 billion in pro forma cash following the deals, all of which are subject to shareholder approval at a June 17 extraordinary general meeting. ...