Royalty Pharma must make an offer for Elan by May 10th or announce it will not proceed, the Irish Takeover Panel said yesterday.

The decision was made following representations by Elan and correspondence with advisers to both companies, the panel said in a statement yesterday.

The deadline pressures New York-based Royalty to make a formal offer, following an “indicative proposal” on February 25th to buy Elan for about $6.5 billion (€5.06 billion), or $11 per American depository receipt. Elan chief executive Kelly Martin has said he doesn’t view the offer as credible.

“The board of Elan welcomes this morning’s imposition by the Irish Takeover Panel of an expected May 10th, 2013, deadline,” Elan said in a statement. “Elan’s focus remains on implementation of its stated strategy.”

The offer may threaten Elan's plans, acknowledged in February, to embark on its own acquisitions to be funded through the sale of its stake in the Tysabri multiple sclerosis drug to Biogen Idec.

Spurned efforts
Elan's board has spurned Royalty Pharma's efforts to conduct due diligence to facilitate a bid, Royalty Pharma said yesterday in a statement.

“The refusal of the board of Elan to engage with Royalty Pharma risks depriving Elan shareholders of the opportunity to decide on the merits of the possible offer,” the company said.

Royalty hopes to add hundreds of millions of dollars of royalty rights for multiple sclerosis drug Tysabri to its stable of royalty streams.

The Royalty approach put into question Elan's plans to return cash to investors and spend on acquisitions following the $3.25 billion sale of its 50 per cent stake in Tysabri to partner Biogen Idec.
– Bloomberg/Reuters