Elan takeout: Not for faint of heart

With $10.2 billion erased from its market cap since Jan. 17 and $1.6-$1.7 billion in product sales projected for this year, Elan Corp. plc would appear vulnerable to a takeover bidder in search of adventure. Indeed, at Friday's close of $14.80, ELN's market cap of $5.1 billion is below its enterprise value of $5.7 billion (market cap minus cash and marketable securities of $2.36 billion plus debt of $2.99 billion).

No suitor had appeared publicly as of last Friday, perhaps reflecting the counter-balancing issues surrounding the company's accounting issues. Given the climate engendered by the Enron scandal, no one may want the headaches of buying a company that the SEC is investigating (see BioCentury Extra, Thursday Feb. 7). ...