The spat between Elan and Royalty Pharma has taken another turn after the Irish drugmaker won a temporary restraining order against the US-based investment firm, which is pulling out all the stops to acquire it.
The Manhattan District Court's decision means that Royalty's $6.4-billion hostile takeover plans are now in limbo as it is unable to close its tender offer for now.
Elan's argument was centred on the claim that Royalty had failed to disclose all the information required by law, thereby denying Elan's shareholders the chance to properly evaluate its offer, according to Reuters.
"The effect of this uncertainty is to coerce Elan's shareholders to accept Royalty Pharma's inadequate offering price rather than wait to determine the undisclosed consequences of Royalty Pharma taking control of Elan, the Dublin-based group reportedly said in its complaint.
A hearing has been scheduled for next week to decide whether or not Elan will be granted a preliminary injunction against Royalty, media reports note.
Elan also reported this week that it received injunctive relief from the Irish High Court restraining Echo Pharma Acquisition Limited (Royalty Pharma's bid vehicle) from distributing to shareholders a proxy statement filed with the US Securities and Exchange Commission.
However, the injunction is no longer relevant given that Royalty subsequently agreed not to further disseminate its proxy statement until the Irish Takeover Panel has reviewed the contents of the proxy statement for compliance with Irish Takeover Rules disclosure requirements.
Elan is standing its ground that Royalty's bid significantly undervalues its business and that of its Tysabri asset, which, it says, will generate income for many years to come and has "a multitude of potential additional life cycle opportunities".