Monday, May 12

TYSABRI...BIOGEN: The most acrimonious takeover battles in recent memory

February 6, 2013
Elan restructures the Tysabri collaboration with Biogen, moving to an upfront $3.25 billion payment and a tiered royalty structure for the asset

February 22
Elan sets out its strategy following the Tysabri deal, setting out plans to conduct a $1 billion share repurchase, to refinance outstanding debt, and to diversify
February 25
Royalty Pharma announces it plans to make an offer of $11 for every Elan share, and questions Elan’s management, arguing it “does not have a track record of generating attractive returns from acquisitions or in-licensed products for Elan”

March 4
Elan announces a cash dividend policy under which 20% of the Tysabri royalties will be paid out to shareholders

April 15
Royalty Pharma announces a firm offer for Elan of up to $12 per share, depending on the share buyback strike price. It adds that following the “completion of the Tysabri transaction, Elan has little or no strategic value and the field of likely acquirers of Elan has narrowed sharply”

April 18
Elan announces the results of its Dutch auction tender offer, with the strike price set at $11.25

April 22
Elan announces that, after careful review, it believes Royalty Pharma’s offer “substantially undervalued the company”

May 2
Royalty Pharma issues an offer document, and notes that Johnson & Johnson, Elan’s largest shareholder, tendered all of its shares in the Dutch auction at $11.25, the lowest price in the range set by Elan. Royalty says in a statement: “J&J’s actions speak volumes”

May 13
Elan announces a $1 billion royalty participation deal with Theravance, whereby Elan has a 21% participation interest in potential future royalty payments associated with four respiratory programmes

May 16
Elan rejects the Royalty Pharma offer

May 20
Elan announces a string of transactions – the acquisition of AOP Orphan, the divestment of Alzheimer’s drug ELND005 and a $200m share buyback – to be voted on by shareholders at an EGM. Royalty Pharma increases its offer to $12.50 in an all-cash deal. It also accuses Elan of dramatically overpaying in the Theravance deal, and, in an important step, announces its offer will lapse if any of the transactions are approved at the EGM

May 23
Elan responds to Royalty Pharma’s revised offer, and once again argues it substantially undervalues the company

May 30
Elan provides shareholders with what it calls a “categorical view on value”, arguing Royalty Pharma’s offer undervalues the assets by up to $4.3 billion

May 31
Royalty responds by issuing a presentation on why it believes Elan’s valuation is “far too high”

June 3
Elan issues a formal response to the revised offer made on May 23, setting out in more detail why it believes Royalty’s offer undervalues Elan. It states: “Royalty Pharma’s claims directly contradict the facts”

June 4
Elan obtains an injunction restraining Royalty Pharma from distributing to its shareholders a proxy statement filed with the US SEC, claiming that it fails to comply with several material disclosure requirements under the Irish Takeover Rules. It also files a legal complaint in New York

June 5
Royalty Pharma calls the Elan board’s legal moves “deplorable”. It accuses Elan of filing a lawsuit two days earlier on June 3, a public holiday, without giving it notice or an opportunity to respond on the basis that it had been unable to contact the Panel. Royalty Pharma says this was despite the fact that it itself had been in regular communication with the Panel over the holiday weekend

June 6
Elan accuses Royalty Pharma of issuing a “grossly misleading statement regarding the outcome” of Elan’s Irish High Court proceedings. It also highlights the US bidder’s “complex web of domestic and offshore limited partnerships” and “opaque capital structure that has the effect of concealing Royalty Pharma’s financial backers and investors and the identities of those that actually own and control Royal Pharma”

June 7
The Irish Takeover Panel rules that Royalty Pharma must lapse its offer for Elan if any of the resolutions being put to Elan’s EGM are passed, and that Royalty Pharma’s proxy statement did breach Irish Takeover Panel rules

Royalty Pharma later announces it will increase its offer to $13, plus a contingent value right of up to $2.50 per share.

It also accuses Elan of undertaking a “frenetic jumble of value-destructive acquisitions, dispositions, minority investments, share repurchases, share issuances, debt redemptions and debt issuances in what Royalty Pharma regards as an obvious attempt to fend off Royalty Pharma’s increased offer”

June 10
Elan’s board rejects the revised offer from Royalty Pharma, and announces that, in response to “several unsolicited corporate enquiries”, it has instructed its advisers to assess any and all strategic interests in the company

June 11
Elan withdraws the lawsuit against Royalty Pharma after it revises its tender offer documents, and issues a letter urging shareholders to reject Royalty Pharma’s offer and vote for the four resolutions at the EGM

Royalty Pharma responds by describing the EGM circular as “misleading”, saying it omits key information. It also “reluctantly” files judicial review proceedings relating to the decision by the Irish Takeover Panel, forcing it to lapse its offer if the ELND005 transaction and/or the share repurchase programme are approved at the EGM

June 14
Elan announces a formal sales process. Royalty Pharma says this is “a clear frustrating tactic that offers shareholders no certainty that a deal will ever be reached”