Elan Corp has welcomed a decision by the Irish Takeover Panel which states that investment group Royalty Pharma needs to make a concrete offer for the Dublin-based group by May 10 or walk away.

In February, Royalty offered to buy Elan for $11 per share, or around $6.50 billion. The proposal from the USA-based group, which acquires royalty interests and rights on drugs, came just after Elan unveiled plans to return $1 billion to stockholders and explore acquisitions of its own, following the sale of its stake in the multiple sclerosis blockbuster Tysabri (natalizumab) to partner Biogen Idec for $3.25 billion, plus royalties; that deal closed earlier this week.

Elan has not been overly impressed with Royalty's advances to date and the ITP agrees with the firm that "an indicative proposal" was made which "contained inter alia a number of pre-conditions to the making of an offer". Following representations made by Elan and its advisors, and correspondence with the advisors to both Royalty and Elan, the panel has ruled that a firm bid must be made by 5pm on May 10 or the tenth business day after a buyback programme Elan is undertaking which is expected to be settled with its stockholders by April 25.

Furthermore, if Royalty does not proceed with an offer, it will not be permitted to make an approach to Elan for another year. The latter reiterated its view that Royalty's "highly conditional indication of interest is opportunistic in its timing" but "any credible proposal which may be made by Royalty or any other party will of course be considered".

Royalty said it was "disappointed that the board of Elan continues to refuse to work" with it to facilitate an offer "and has instead sought to impose a deadline...to make such an offer without the benefit of due diligence”.