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Royalty Pharma today posted a new
investor presentation summarizing its Further Increased Offer for Elan
Corporation, plc
and urging Elan shareholders to VOTE AGAINST ALL
FOUR of Elan's proposals at its upcoming Extraordinary General Meeting on June
17, 2013. A copy of the new investor presentation is available at
www.royaltypharma.com.
ADS holders who hold in street name must vote by Wednesday June 12 at 11:59
p.m. New York time.
Ordinary share owners have until 10:00 a.m. Irish Time on Saturday June 15 to
vote by proxy through Computeshare, Elan's transfer agent.
The Further Increased Offer represents compelling, immediate value in the form
of $13.00 in cash, plus continued upside participation through a contingent
value right (CVR) worth up to $2.50 per share, potentially valuing each Elan
share at up to $15.50.
Royalty Pharma reiterated its view of the Elan transactions:
o Theravance: Elan overpaid by approximately $300-500m and the subset of
Theravance royalties Elan agreed to buy are at a real risk of being
cannibalized by other Theravance products that did not get included in the
deal
o AOP: Unjustifiable valuation at 17x EBITDA and 4.5x current revenue,
extremely high multiples for what is essentially a drug distribution
business
o Speranza: disguised write-off vehicle for ELND-005, a failed drug that
Elan has inexplicably been pushing forward, spending $143m on it through
2012
o Share Buyback: As Glass-Lewis report says, the proposed share repurchase
"lacks financial justification". Solely proposed to fend off Royalty
Pharma
The consideration is not conditional on due diligence and has an acceptance
threshold of 50% plus one share^[1]. The presentation also details Royalty
Pharma's view on the value of Tysabri, including an analysis of numerous
misleading calculations contained in Elan's presentation on the value of
Tysabri. Note that the majority of equity research analysts agree that
Royalty Pharma's offer is above the intrinsic value for Elan^[2] and offers
compelling immediate value with continued upside participation.
To have Royalty Pharma's offer as an option, Elan shareholders MUST vote down
ALL FOUR RESOLUTIONS. ISS and Glass Lewis, leading proxy advisory firms, have
ALSO recommended that Elan shareholders vote AGAINST ALL FOUR RESOLUTIONS^[3].
Each vote makes a difference. The deadline for voting Elan ADSs held in street
name through banks and brokerage firms that use BroadRidge is Wednesday, June
12 at 11:59 p.m., New York time.
Please refer to the Further Revised Offer Document for details of the Further
Increased Offer. Capitalized terms used but not defined in this announcement
shall have the meaning given to them in the Further Revised Offer Document.
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