A High Court judge has granted an injunction effectively keeping alive Royalty Pharma's $6.7 billion offer for Elan pending the outcome of a full legal challenge to a decision of the Irish Takeover Panel.
The Panel had not objected to the injunction, which applies pending the outcome of judical review proceedings by Royalty against it over its decision last week requiring Royalty to lapse or withdraw its offer if any of four resolutions are passed at an extraordinary meeting of Elan shareholders next Monday. The judicial review opens next Wednesday.
The interlocutory order restrains the Panel from directing Royalty to lapse its increased offer to acquire Elan or from treating the offer as having lapsed if either or both of two particular resolutions before shareholders – the spin-off of the ELND-005 drug programme and a $200 million share buyback – are passed, but two other resolutions – the $1 billion Theravance investment and the AOP Orphan acquisition – are rejected.
Cian Ferriter SC, for the Panel, and Paul Gallagher SC, for Elan had not objected to an order in that form but both counsel stressed they would be very concerned that any announcements by Royalty should not represent the order as extending any further than its terms.
Mr Ferriter said he was mindful his client was a statutory body caught in the middle of “a big battle” between Elan and Royalty.
Mr Gallagher argued the market was being confused by Royalty in a way that amnounted to a fundamental breach of the rules and the court was being treated in a way that was not acceptable.
He also raised issues about Royalty’s ability to meet any claim for damages. Royalty, the court heard, is a single member private company with registered offices in Dublin set up last March with authorised share capital of $10,0000.
Eoin McCullough SC, for Royalty, said his concern was to preserve the status quo pending the full hearing and his side had asked the Panel earlier if Royalty could make a statement that would meet the Panel’s requirements. Royalty wanted to ensure Elan shareholders could be notified the Royalty offer was not to be treated as lapsed if either or both of what it regarded as minor resolutions were passed at Monday’s meeting.
In granting the order yesterday, Mr Justice Peter Kelly stressed it merely maintains the status quo and warned there would be serious consequences should there be any misrepresentation of it.
Royalty will now apply on Wednesday for leave for judicial review of the Panel’s June 6th decision with the leave application to be treated as a full hearing.
