Royalty Pharma has reduced the acceptance threshold for its increased $6.4 billion bid for Elan to 50 per cent plus one share as it sought to gather just enough support to take over the Irish drug firm.

Royalty raised its hostile cash bid for Elan to $12.50 per share on Monday, but made it conditional on Elan shareholders rejecting at a meeting due to be held on June 17th the series of defensive transactions recently announced by the Dublin-based company.

The US firm had also said on Monday it reserved the right to reduce the acceptance threshold from 90 per cent.

"We believe that the increased offer provides shareholders an attractive financial alternative. We encourage them to vote against Elan's announced transactions and tender their shares in favour of Royalty Pharma," Royalty's chief executive Pablo Legorreta said in a statement.

Royalty Pharma, which buys royalty rights on patented drugs, has said Elan’s efforts to reinvent itself through a series of acquisitions and debt deals were hasty and ill-conceived.

Royalty’s new bid, increased from an offer of $11.25 a share announced last month, comes in the face of Elan’s insistence that it is worth more.

Elan rejected the previous bid, which it described as a “nuisance,” and said it was determined to keep its independence. Its board is due to assess the new offer and advised shareholders on Monday to take no action for the time being.

Reuters