Stock Market Watch

Elan Corporation Shares Surge on Takeover Offer (ELN)

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Shares of Elan Corporation Plc (ADR) (NYSE: ELN) have risen sharply in trading today after investment firm Royalty Pharma made a $6.6 billion bid for the company.

Key Points

  • Royalty Pharma has offered to acquire Elan for $11 per share
  • The offer price from the investment firm represents a premium of 4% over ELN’s closing price on Friday

Royalty Pharma today said that it plans to offer $11 per share to acquire Elan. The offer comes after Elan earlier this month announced plans to raise over $3.25 billion through the sale of interests in its main drug, Tysabri to Biogen Idec.

Elan CEO Kelly Martin, earlier this month, said that the transaction would allow Elan and its shareholders to realize upon close a meaningful percentage of the current value of Tysabri while maintaining long-term cash flow realization through the multi-tiered royalty structure of the complete asset. Martin also said that the restructuring of the business collaboration with Biogen will provide ELN with significant strategic flexibility.

However, Royalty Pharma believes that the company’s plans are risky and therefore it decided to make an offer to acquire Elan. The investment firm believes that its cash proposal to Elan shareholders represents the full value of the company today.

Elan, meanwhile, confirmed the offer from Royalty Pharma in a press release earlier today. The company said that the timing of the offer from Royalty Pharma is highly opportunistic, given shareholders have not had the opportunity to assess and realize the full benefit of the Tysabri transaction and the partial unlocking of its value.

Elan also noted that the offer from Royalty Pharma is heavily conditional in nature.

ELN shares rose to an intra-day high of $11.62 earlier today. At last check, the stock was trading 6.13% higher at $11.25 on above average volume of 11.42 million.

About Elan Corporation Plc

Ireland-based Elan Corporation Plc is a biotechnology company.

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edliston
Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.

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Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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