) Board of Directors recently rejected Royalty Pharma's offer to
acquire all the shares of Elan for $11.25 or less per share.
Elan' Board of Directors believed that Royalty Pharma's offer
significantly undervalued the company's current business platform
and its future prospects. The Board was unanimous in rejecting
the offer. Meanwhile, the company advised its shareholders not to
take any action in relation to the Royalty Pharma offer.
Last week, Elan announced the final results of its modified
Dutch auction tender offer, of a maximum aggregate value of $1
billion, to repurchase its ordinary shares, including ordinary
shares represented by American Depositary Shares. As a result of
the tender offer, the Dutch auction strike price stands at
We note that 1 ADS is equal to 1 share of Elan.
Following the determination of the Dutch auction strike price
at $11.25, Royalty Pharma confirmed that its offer for each
outstanding share and ADS of Elan is also the same. Earlier
Royalty Pharma announced its offer at different prices for
different Dutch auction strike prices, where it mentioned that if
the strike price is $11.25, it will offer the same for each
outstanding share and ADS of Elan.
Royalty Pharma had also stated that it was not aware of Elan's
current cash position. If the latter does not disclose its cash
position, Royalty Pharma would have to reduce its offer by $1.00
and Elan's shareholders would have an option to receive up to
$1.00 in cash depending on its cash position.
Meanwhile, Elan closed its Tysabri (natalizumab) collaboration
) earlier this month. As a result, Biogen gained full strategic,
commercial and operational control over the drug.
Elan, a biotechnology company, currently carries a Zacks Rank
#3 (Hold). Currently, well-placed biotech stocks include
). Both stocks carry a Zacks Rank #1 (Strong Buy).
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