Elan considered buying US investment firm Royalty Pharma last year, six months before Royalty made its approach for the Irish drugmaker, the offer document for the bid showed.

Royalty submitted its $5.7 billion bid today, standing by a reduced price in the face of Elan’s insistence it is worth more. Elan rejected the $11.25 per share bid last month and is determined to keep its independence.

Shareholders, most of whom Elan claim had no interest in Royalty’s original proposal, have until May 31st to make up their minds.

Documents now show that the two companies, who have not spoken since Royalty’s first approach in February, last year discussed ways to work together. One suggestion was for Elan to buy Royalty to facilitate its aim then of becoming a public company.

Elan chief executive Kelly Martin initiated the talks last August, the document said, and top executives from both companies met once a month until December. By then Royalty was less interested in going public and instead wished to buy Elan.

Elan indicated at that point that it was focused on doing deals of its own and the document states that none of its executives have replied to phone calls or emails from Royalty chief executive Pablo Legorreta since he informed them of its intended offer on February 18th.

Royalty, attracted by the promise of lucrative revenues from Elan’s multiple sclerosis drug Tysabri, first approached a week later. Elan fought back via manoeuvres designed to frustrate the bid, which is contingent on 90 per cent acceptances.

Reuters