Elan tenders for $351 million Elan Pharmaceutical III notes

New York, Oct. 28 - Elan Corp. plc said it has begun a cash tender offer for up to $351 million of the $390 million principal amount of the series B guaranteed notes and series C guaranteed notes issued by its subsidiary, Elan Pharmaceutical Investments III Ltd.

Elan is also soliciting consents to amend the guarantee agreement for the notes and the 6.5% convertible guaranteed notes issued by Elan Capital Corp. Ltd. that will effectively waive compliance with all covenants restricting certain activities of Elan and its subsidiaries without the prior consent of holders of a majority of the notes.

Elan needs the consent of holders of a majority of the principal amount of the notes to make the change.

Holders cannot tender without delivering consents.

The Dublin, Ireland, biotechnology company is making the offer through its Elan International Services Ltd. subsidiary.

Holders who tender by the early tender deadline of midnight ET on Nov. 10 will receive $1,013.50 per $1,000 principal amount, including an early tender premium of $13.50 per $1,000 principal amount.

Holders who tender after the early deadline but before the expiration deadline of midnight ET on Nov. 26 will receive par.

In both cases Elan will pay accrued interest up to but excluding the settlement date.

In addition, Elan will pay a consent fee of $5.00 per $1,000 if it receives tenders of a majority of the notes.

The tender is subject to the receipt of tenders and consents of at least a majority of the principal amount of the notes and completion of a debt financing on acceptable terms. Elan also announced the sale of $850 million of new notes.

Morgan Stanley & Co. Inc. is dealer manager (800 624-1808 or 212 761-1941 (collect), attention Francesco Cipollone).

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