* Royalty wins relief to appeal Takeover Panel ruling
* Royalty bid contingent on shareholders rejecting votes
* U.S. firm says shareholders set to approve share buyback
By Padraic Halpin
DUBLIN, June 13 Royalty Pharma won an
Irish court injunction against a regulator on Thursday, allowing
the U.S. company to appeal a ruling on conditions that threaten
to scupper its hostile bid for Elan Corp.
Royalty, hoping to convince Elan shareholders to accept its
bid in the face of opposition from the Irish drug firm's board,
received a blow last week when the state body that monitors
takeovers ruled that it could not revise the terms of its offer.
Seeking to stop Elan pushing through two sets of defensive
acquisitions at a meeting of shareholders on Monday, Royalty
last month made its bid subject to them rejecting any resolution
presented at the meeting.
Elan said only two of the four resolutions it planned to put
forth would relate to the acquisitions Royalty opposes, so the
U.S. company sought to limit its conditions to just those two
resolutions. However, this was change forbidden by the Irish
Justice Peter Kelly agreed to grant the injunction on
Thursday and said the court would meet again next Wednesday to
decide if Royalty will be allowed to mount a challenge to the
takeover board's decision.
The injunction was the third granted in the past 10 days in
a takeover saga that has become increasingly bitter. Elan last
week won and subsequently dropped injunctions in courts in
Ireland and the United States.
The temporary court relief stops the takeover panel from
immediately affirming its ruling that Royalty would have to drop
its bid if any of the resolutions are passed on Monday.
If the court rejects Royalty's appeal, it will be forced to
honour the original conditions and drop the bid if shareholders
back either of the other two uncontentious resolutions - a share
buyback and a drug spin-off aimed at cutting operating costs.
Citing a review it had undertaken of voters, Royalty claimed
on Thursday that after 70 percent of Elan's U.S. shareholders
had lodged their response to the resolutions ahead of Monday's
meeting, it believed the vote on the buyback would be approved.
The majority of Elan's shares are held in the United States.
Royalty's current bid offers $13 in cash per share, compared
with a previous $12.50. The latest bid 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.
A source with direct knowledge of the situation told Reuters
on Monday that Elan's management, which has said it believes
the company is worth $15.50 to $20.80 a share, would "seriously
consider" a cash offer at the bottom of that range.