'Unsolicited interest' in Elan assets, chairman tells AGM

ELAN CORPORATION is seeing significant "unsolicited interest" from several quarters in its assets, according to company chairman Garo Armen.

He told the troubled drug marker's AGM he was hopeful that it would have a new chief executive in place within three to six months and the planned 1.5 billion euro restructuring programme was going well.

Mr Armen also reassured the surviving workforce in Athlone, saying it was unlikely the Irish manufacturing plant would be sold off.

Despite the chairman's bullish pronouncements and an assured performance at the meeting in Dublin's Burlington Hotel, the company's share price was marked down by over 10% during the AGM but recovered to close down 5%. A short list of eight possible candidates, drawn from outside the company has been completed, according to Mr Armen, who, however, declined to rule out the possibility that an internal candidate might assume the position held until recently by Donal Geaney, the man who also occupied the chairman's seat. According to Mr Armen, Mr Geaney and Tom Lynch, the former deputy chairman, are to remain on as consultants for two years. They will be paid their existing flat salaries, which in Mr Geaney's case, amounts to just over $1m a year and in Mr Lynch's case, amounts to $600,000. They will not be receiving any bonus, or severance payment, he added. Messrs Geaney and Lynch are spending much of their time co-operating with the US Securities & Exchange Commission, which is carrying out an investigation into the affairs of the company.

The outcome of the investigation will be critical to the company's future as it will, in all likelihood, determine whether a raft of class actions being brought by US-based shareholders succeed. The chairman said the company had only a small amount of insurance cover to meet the event of an adverse ruling by the SEC and the possibility of a large number of successful class action suits. Such a ruling is not expected in the short term.

Mr Armen said the board would be "adamant to take action" against anyone associated with the company found guilty of wrongdoing.

He added that no evidence of impropriety had been unearthed during the course of an internal investigation carried out on the company's behalf.

He rejected suggestions that the company had been "run into the ground" by the former top managers adding that Mr Geaney and Mr Lynch had "played a key role in building the value of the company".

Their retention as consultants was justified on the ground that "they have an enormous wealth of knowledge which we need to tap into.."

However, Mr Arnem conceded that the company must accept some of the blame for management's failure to respond quickly enough to questions raised by analysts and in the media.