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Royalty Pharma eases condition for Elan offer

NEW YORK (AP) -- Royalty Pharma has eased one of its conditions for completing its recently increased offer to buy Irish drugmaker Elan Corp. PLC for $12.50 per share, or about $7.5 billion.

The New York company said Thursday it had lowered a threshold for the percentage of shareholders who must vote for the deal to more than 50 percent from 90 percent.

Royalty's offer, which it announced Monday, also is contingent on shareholders voting against Elan's recent push to refocus its business.

Elan's board said the new offer undervalues the company and urged shareholders to reject it.

Elan plans to pay about $338 million for a privately held Austrian drug developer and at least $110 million for stakes in two other companies. The company also will pay $1 billion for the right to future royalties from four respiratory treatments being developed by Theravance Inc. and GlaxoSmithKline.

The drugmaker announced those transactions after closing a deal to sell its interest in the multiple sclerosis treatment Tysabri to Biogen Idec Inc., its former partner on the blockbuster drug, for $3.25 billion in cash and recurring royalty payments.

Royalty is a privately held New York company that buys royalty interests in drugs and late-stage drug candidates. It had offered in February to buy Elan for $11 per share and later raised that bid to $11.25 per share.

Elan has said the $11.25 bid was much too low. Elan shares rose 32 cents to $12.36 on Thursday.

Elan also priced at $850 million debt offering on Thursday. The company is selling senior notes due in 2021 for general corporate purposes, but said it will redeem the notes at full price plus accrued and unpaid interest if the Theravance deal isn't completed. It expects the offering to close on May 31.