Elan gets tenders, consents from 90% of series B, series C notes

New York, Nov. 17 - Elan Corp. plc and its wholly-owned subsidiary, Elan International Services Ltd., said that the company has received tenders and consents from the holders of $352.682 million of the series B guaranteed notes and ceries C guaranteed notes issued by its subsidiary Elan Pharmaceutical Investments III Ltd. under the company's previously announced tender offer and consent solicitation. The notes were received as of the early tender deadline, which expired as scheduled at midnight ET on Nov. 10, without extension.

Under the terms of the tender offer and consent solicitation, Elan International Services and Elan Corp. have accepted for payment and have paid for, on a pro rata basis, $317.406 million principal amount of the notes (representing about 90% of the notes tendered) for a total of $323.641 million plus accrued and unpaid interest to date. The amount includes a total early tender premium of $4.285 million and a total consent payment of $1.95 million. Consent payments were made to all holders regardless of whether they tendered their notes or delivered consents.

The underlying tender offer and consent solicitation meanwhile continue and are scheduled to expire on Nov. 26, subject to possible extension. At the expiration time, Elan and Elan International Services expect to accept for payment an additional $33.594 million principal amount of notes, including, if necessary, part of the additional $35.276 million principal amount of notes tendered by the early tender deadline and not previously accepted for payment. That additional amount will bring the total principal amount of notes accepted for payment to $351 million.

As previously announced, Elan, a Dublin, Ireland-based biotechnology company, said on Oct. 28 that it had begun a cash tender offer through its Elan International Services Ltd. subsidiary for up to $351 million of the $390 million principal amount of the guaranteed notes, and was also soliciting consents to amend the guarantee agreement for the notes and the 6.5% convertible guaranteed notes issued by Elan Capital Corp. Ltd.

It set an early tender deadline of midnight ET on Nov. 10, and said that the tender offer will expire at midnight ET on Nov. 26, subject to possible extension.

The consents the company is seeking would 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. It said that holders cannot tender without delivering consents.

The company said that holders who tender by the early tender deadline will receive total compensation of $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 will receive par for the bonds.

In either case, 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 (on Nov. 10, Elan sold an upsized offering of $1.15 billion of fixed-rate and floating-rate notes).

On Nov. 11, the company said that it had received the required consents to approve the proposed changes to the notes' indentures. The consents were received by the early consent deadline.

As a result of the receipt of consents, Elan said that it expects to enter into an amendment to the guarantee agreement for the notes. The amendment and the consent agreement will become effective only upon the pro rata acceptance for purchase of the notes tendered.

Notes tendered may no longer be withdrawn and consents delivered may no longer be revoked.

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

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