Elan drops Royalty Pharma injunction as Takeover Panel steps in

A legal action by pharmaceutical firm Elan aimed at stopping Royalty Pharma distributing a statement to Elan's shareholders is not proceeding, the High Court was told yesterday.

Irish-based Elan had brought the proceedings arising from Royalty Pharma’s attempt to mount a $6.5 billion hostile takeover of Elan.

Elan secured a temporary injunction on an ex-parte basis (one side only represented) restraining Echo Pharma Acquisition Limited, a bid vehicle set up by Royalty Pharma, distributing to Elan's shareholders a proxy statement filed with the United States Securities and Exchange Commission last Friday.

Takeover regulations
On Monday, Elan's lawyers told Mr Justice Gerard Hogan the proposed proxy statement failed to comply with material disclosure requirements under Irish takeover regulations. The injunction was sought in order to prevent the material being sent to Elan's shareholders before the New York Stock Exchange opened for business.

A proxy statement is a statement required of a firm when soliciting shareholder votes and is filed in advance of the annual meeting.

Issues covered in a proxy statement can include proposals for new additions to the board of directors, information on directors’ salaries, information on bonus and options plans for directors, and any declarations made by company management.

Injunction to lapse
Yesterday Mr Justice Hogan was told by Michael Cush SC, for Elan, that the matter was not proceeding and the temporary injunction could be allowed lapse because Echo had agreed to a comply with a request from the Irish Takeover Panel, the body responsible for monitoring and supervising takeovers here, not to disseminate any further material to Elan's shareholders until it had considered and determined the disclosure requirements of which Elan had complained.

Maurice Collins SC, for Echo, said the injunction had come “out of the blue” as far as his client was concerned. The Irish Takeover Panel was the appropriate forum to address the issues raised by Elan, not the courts, he added.

The matter was adjourned to next Tuesday when the issue of legal costs will be considered.