The latest development in a two-month tug of war between Elan and Royalty Pharma has Elan flat-out rejecting Royalty’s most recent offer for the company. The battle has revolved around Royalty’s incessant offers to purchase Elan despite the latter’s opposition to the proposed takover. Just one week ago, Royalty made $7.3 billion offer to buy Elan.

Today, Elan reports that its board of directors, after “careful review and consideration”, has determined that Royalty Pharma’s offer to acquire all of the shares of Elan for $11.25 or less per share, substantially undervalues the company.

“The offer from Royalty Pharma grossly undervalues Elan’s current business platform and our future prospects,” comments Robert A. Ingram, chairman of Elan. “As a result the board unanimously and without reservation rejected the offer.”

The board says it will, in accordance with Irish Takeover Rules, communicate with shareholders again following publication of Royalty Pharma’s formal offer document. Elan’s financial advisors are Citigroup, Morgan Stanley, and Ondra Partners, and its legal advisors are A&L Goodbody and Cadwalader, Wickersham and Taft.

The saga between the firms began in February, when Royalty suddenly made an offer for Elan valued at $6.5 billion. Elan did not take the bait, prompting Ireland’s Takeover Panel to set a May 10 deadline for Royalty to make a formal offer for Elan or declare it would give up plans to buy the biotech giant. This prompted the $7.3 billion offer that was rejected today.

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