DUBLIN (Reuters) - U.S.-based Royalty Pharma
Royalty received a blow in its battle to take over Elan last week when Ireland's Takeover Panel ruled that the investment firm could not revise the terms of its offer, meaning it could become null and void at an Elan shareholder meeting on Monday.
Royalty, which had a third increased bid rejected by Elan's board this week, had made its offer contingent on Elan shareholders rejecting resolutions at the meeting, in a bid to stop the Dublin-based firm finalizing a series of defensive acquisitions.
However after Elan said only two of the four resolutions concerned the deals, Royalty sought to change its conditions. The panel's rejection means its bid will lapse if shareholders back either of the other two uncontentious resolutions - a share buyback and a drug spin-off aimed at cutting operating costs.
Royalty contends that the ruling deprives Elan shareholders of a fair opportunity to consider its bid and lawyers for the firm asked Ireland's commercial court to hear an appeal on the ruling next Wednesday.
With shareholders set to meet two days before that, Royalty asked that the takeover panel's ruling be frozen in the meantime and the court agreed to sit again on Thursday to consider whether or not to put a stay on proceedings.
Elan, which has been resisting the advances of its suitor for more than three months, opposed the move.
Royalty's latest bid offers $13 in cash per share - compared with a previous $12.50 - and added a clause known as a contingent value right (CVR) that could add a further $2.50 per share if blockbuster drug Tysabri hits certain sales milestones.
The battle between the pair has become increasingly bitter in recent weeks, involving court hearings, injunctions and a war of words, and a former dissident director of Elan weighed in on Wednesday with a stinging attack on the company's strategy.
In a letter published in the Financial Times Jack Schuler said he had no confidence Elan chief executive Kelly Martin was acting in shareholders' interests.
Nominated to the board in June 2009, former activist shareholder Schuler and fellow dissident director Vaughn Bryson quit 15 months later after they failed in a challenge to Elan's transparency and corporate governance.
Elan rejected Schuler's remarks and noted in a statement that its shares had more than trebled since he left the board.
(Reporting by Sarah O'Connor, writing by Padraic Halpin; Editing by Elaine Hardcastle)