LONDON, May 20 (IFR) - Irish drugmaker Elan will stage a
return to the bond market this week with a USD800m high-yield
offering that will fund share purchases, capital expenditure and
The company, rated Ba3/B+, announced Morgan Stanley as sole
bookrunner on the eight-year senior note, callable after three
years, coinciding with an announcement on Monday that it was
buying two private drug firms and buying back more shares.
Elan, which currently has no bonds outstanding, rejected a
USD5.7bn bid from US investment firm Royalty Pharma and is
trying to convince shareholders to do the same by returning cash
and going on a spending spree that began with a USD1bn deal last
week with US company Theravance.
Elan made its second and third purchases on Monday, buying
Austrian rare drug specialist AOP Orphan for EUR263.5m (USD337m)
and paying USD40m for a 48% stake in Dubai-based sales and
marketing firm Newbridge Pharmaceuticals.
It will still have USD1.2bn of cash left to spend if
shareholders approve the acquisitions, and plans to announce
more deals in the second half of the year, chief executive Kelly
Martin said on Monday.
The company said last week it was planning to raise a bond
to fund the 21% stake of the royalties that Theravance receives
from GlaxoSmithKline for its respiratory drugs. The deal, like
the issuer's previous forays in the bond market, was expected to
be in dollars.
Morgan Stanley will begin a roadshow for the bond on Monday
and is expected to price it later this week after the
presentations end on Wednesday.
"We don't have a pre-prescribed capital structure. We are
not afraid of debt, we are not afraid of not having debt, but
what we won't do is use debt to fund long-term pipeline assets,"
Martin said on an investor conference call last month.
The share buyback and package of deals, including last
week's Theravance deal, must be approved at a special
shareholder meeting on June 17.