Irish drug company Elan put itself up for sale today, seeking to fend off a hostile bid by Royalty Pharma that shareholders will consider next week.

Elan urged its shareholders not to tender into Royalty’s current offer, worth a potential $8 billion, but said the US company would be able to participate in the formal sale process if it so wishes.

“Elan Corporation ... today announced that it is proceeding with a formal sale process in light of the expressions of interest received to date,” the company said in a statement.

A source with direct knowledge of the situation said earlier this week that Elan had attracted the interest of a number of mid-sized drug companies and a cash offer of $15.50 per share could be enough to secure its support for a bid.

Royalty’s current bid offers $13 in cash per share 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.

Seeking to stop Elan pushing through two sets of defensive acquisitions at a meeting of shareholders due to be held on Monday, Royalty last month made its bid subject to them rejecting all resolutions presented at the meeting.

Elan’s shares were trading at €10.15 at 1357 GMT today, up 9 per cent on the day.

Reuters