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Elan Is Said to Near Sale of Company With Perrigo in Lead

An attendee holds Elan Corp. branded paperwork ahead of the company's annual general meeting in Dublin, on May 30, 2013. Photographer: Barry Cronin/Bloomberg
An attendee holds Elan Corp. branded paperwork ahead of the company's annual general meeting in Dublin, on May 30, 2013. Photographer: Barry Cronin/Bloomberg

Irish pharmaceutical company Elan Corp. is nearing a sale, with Perrigo Co. as a frontrunner, according to three people familiar with the situation.

An announcement may come as soon as today, said the people, who asked not to be identified discussing a private matter. While Perrigo is the most likely buyer, no final decision has been made and competitors such as Allergan Inc., Mylan Inc. and Forest Laboratories Inc. could still secure a deal, the people said.

Elan has a market capitalization of $7.64 billion. Buying the Dublin-based business would allow a U.S. company such as Perrigo, based in Allegan, Michigan, to re-domicile itself in Ireland, where the corporate income-tax rate is 12.5 percent. It also would give an acquirer access to royalties for the multiple sclerosis drug Tysabri, which Elan discovered and then sold to Biogen Idec Inc. on Feb. 6

Perrigo sells over-the-counter products for conditions such as acid indigestion and nasal congestion, as well as generic drugs, nutritional supplements and animal treatments, according to its website. Arthur Shannon and Bradley Joseph, investor-relations representatives for Perrigo, couldn’t immediately be reached for comment yesterday. Jonathan Birt, an Elan spokesman, declined to comment.

Bonnie Jacobs, a spokeswoman for Irvine, California-based Allergan, declined to comment. Nina Devlin, a spokeswoman for Canonsburg, Pennsylvania-based Mylan, and Frank J. Murdolo, a spokesman for New York-based Forest, also couldn’t be reached outside of regular business hours.

Auction Process

Elan earlier this year began an auction process to seek a buyer after Royalty Pharma, a firm that invests in the income streams from existing drugs, spent four months trying to acquire it. Royalty has been exploring ways to partner with an eventual acquirer of Elan, allowing it to take on royalty streams while the buyer uses the Irish company’s corporate shell, people familiar with the matter said in June.

In February, Biogen, based in Weston, Massachusetts, agreed to buy Elan’s stake in Tysabri for $3.25 billion in cash plus future royalties.

Elan’s shares rose 42 percent this year to 11.14 euros in Dublin as of July 26. Perrigo’s shares advanced 29 percent to $134.23 in New York, giving it a market value of $12.6 billion.

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