Exclusive: Perrigo, Forest prepare bids for Elan this week -sources

Wed Jul 24, 2013 5:00pm EDT

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(Reuters) - U.S. drugmakers Perrigo Co (PRGO.N) and Forest Laboratories Inc FRX.N are preparing to submit takeover bids for Elan Corp ELN.I ELN.N this week and the Irish drugmaker hopes to announce a sale as early as next week, according to three people familiar with the matter.

Elan, which has a market capitalization of $7 billion, in June rejected a hostile bid by U.S. investment firm Royalty Pharma worth up to $8 billion, and instead put itself up for sale [ID:nL5N0EQ2C9].

Elan is expecting to receive offers from Perrigo and Forest, the drugmakers that are in the advanced stages of conducting due diligence, the people said on Wednesday.

Companies like Perrigo and Forest are particularly interested in Elan for the tax savings that come from being domiciled in Ireland, where the corporate tax rate is 12.5 percent, said the sources, who wished to remain anonymous because they are not permitted to speak to the media.

Elan and Perrigo declined to comment. Forest did not immediately return a request for comment.

Michigan-based Perrigo, which manufactures over-the-counter pharmaceutical products for the store brand market, has a market capitalization of over $12 billion, according to Thomson Reuters Corp (TRI.TO) data.

Forest, which has a market capitalization of nearly $12 billion, is a New York-based drugmaker whose top products are treatments for depression and Alzheimer's disease. The company also sells cardiovascular, respiratory and pain drugs.

Some Elan investors have speculated that any industry buyer could acquire Elan and sell a portion of the royalties on the drugmaker's multiple sclerosis drug Tysabri to Royalty Pharma, which is what the investment firm has wanted all along.

It is unclear if any such discussions are under way, however.

(Reporting by Jessica Toonkel and Soyoung Kim in New York; editing by Matthew Lewis)

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