Galen Holdings, the Belfast-based pharmaceutical company, has been viewed as a mini-Elan Corporation. Elan has built itself into an international group with a market capitalisation of $6.8 billion (£4.8 billion) and if Galen agrees a deal with privately owned Dutch company, Ferring Pharmaceutical, it will, in just one swoop, be one-third of the way there.

However there are distinct differences in their style of operations. Elan has made dozens of acquisitions and has never had to have its shares suspended. Indeed, negotiations on the last one, the takeover of Neurex, a US-based bio-pharmaceutical company, for $700 million (£500 million), took only six weeks. In contrast, Galen anticipates a share suspension possibly until the end of the year, or almost six months, while it finalises details with the Dutch company. Galen has explained that the long suspension will arise because it wanted to avoid the possibility of a false market in its shares and because of Ferring's obligations to meet Stock Exchange requirements. Laudable reasons. But the suspension has been self-induced; the company, not the Stock Exchange, asked for the suspension. Also, the length of the suspension is unacceptably long.

One report suggested that the two companies had agreed a memorandum of understanding and have begun due diligence. Many publicly quoted companies tell their shareholders as soon as they have agreed the outlines of a deal; they then announce that the terms are subject to due diligence. Why, it should be asked, does Galen not adopted that sort of practice? Due diligence, in any event, should take only a month, or at the outside two months. So why have a target for the end of the year?

Shareholders will be the big losers. During the time of suspension, they will be denied the opportunity to turn their shares into cash. Being denied this opportunity for such a long period would not be tolerated in the litigious US. Less than a year ago, the shareholders subscribed for shares in a company they knew; the prospectus gave details of its history together with financial records. Galen had been barely seasoned as a publicly quoted company when it decided to suspend dealings in its shares. Now the shareholders are in limbo. The proposed deal with Ferring constitutes a reverse takeover, so the enlarged grouping, when it comes back, will be a very different company. Shareholders, of course, can say yea or nay to the deal.

The implications of the long suspension extend beyond the shareholders. Galen's shares account for 1.3 per cent of the ISEQ Index. So the movement in the index during the period of the suspension will not reflect Galen's share price movements. Worse, when Galen comes back in a different format, the index will be distorted by its inclusion. The long suspension will not be welcomed by the institutional investors who judge their performance against the share index.

So apart from limbo land, what are the Galen shareholders facing? With no relevant financial statistics available from Ferring, the prospects cannot be assessed. The proposed merger is supposed to have emerged because the two chief executives - Dr John King for Galen and Mr Frederic Paulsen for Ferring - get on well personally and have the same perception on how the industry should develop.

Ferring is reckoned to be twice the size of Galen in terms of value. If this is the case then it looks as if it gets a lower margin out of its $300 million sales (£214 million) than Galen. That implies that Galen generates higher profit margins than Ferring. How then does that square with Galen's latest interim statement which said it completely withdrew from the low margin commodity intravenous fluid market in the UK in order to have manufacturing capacity to be used for higher margin business? Galen has been accorded a very high market rating because of its strong profit record with a promising development programme (including the development of its transmucosal intravaginal ring drug delivery system for hormone replacement therapy), because it is an exceptionally good employer (the founder, Mr Allen McClay, transferred shares, now worth some £20 million sterling, into the trust for the employees) and because it has been viewed as a mini-Elan.

However, the p/e on the last quoted share price was a heady 52, much higher than its peer Elan whose p/e stands at a less lofty 35. Yet Elan's shares have a far broader appeal, are being recommended by US analysts and are quoted on the New York Stock Exchange (as well as Dublin and London). To justify such a high rating, Galen has a lot to live up. The proposed get-together with Ferring does appear to have a lot of industrial logic, but will only work if it leads to major benefits for Galen shareholders and that ideally should lead to a share quotation on the NASDAQ. However, in the meantime the non-employee shareholders will have to grit their teeth and wait and wait .........