Takeover talk buoys Elan shares

SHARES in Elan were up by nearly 9% yesterday, after surging by more than 17% earlier in the day, on the back of renewed speculation that the company may be bought out by Danish pharmaceutical group, Lundbeck.

While a spokesperson for Elan – headquartered in Dublin with its main production facility in Athlone – reiterated the line that the company doesn’t comment on media or market speculation, yesterday’s boost in the company’s share price was the biggest single day move for the stock since the end of March; when the last link with Lundbeck was mooted.

One Dublin-based analyst expressed doubt over such a takeover happening. Elan’s own management is hopeful of establishing, as part of its ongoing group strategic review, a partnership with a big international pharmaceutical to further develop its pipeline of Alzheimer’s treatments, currently in varying degrees of testing.

Even so, Elan was one of a number of shining lights on a very good day for the ISEQ yesterday. The drug-making firm closed at €4.96, up by 39c from its pre-May bank holiday weekend close on Thursday of last week.

It was joined by drinks group C&C, which rose by almost 7% – or 12c – on the back of positive sales data published by AC Nielsen, which showed that sales of Magners in the British off-trade sector increased by 48% in the four weeks to April 18.

The Dublin and Clonmel-based owner of the twin cider brands Bulmers and Magners, which issues full-year results next Tuesday, closed in Dublin at a price of €1.88 yesterday.

Overall, the Dublin market was up by just over 3% – or 81.11 points – at 2,703 points at yesterday’s close; wavering only slightly from a 129-point, 4.94%, rise by midday.

Elsewhere, the good trading also boosted Irish banks. AIB climbed 8.85% – or 9c – at €1.05; Bank of Ireland nudged towards €1 by rising 9c (21.95%) to 94c and Irish Life & Permanent (IL&P) up by nearly 9% – or 17c – to €2.10.

Insulation products provider, Kingspan gained 71c to close at €4.63 and Tralee-headquartered food group, Kerry was up by 10c at €15.65. Paddy Power was another good mover with an 87c gain to €14.80, while Ryanair rose by 9c to close at €3.39.

London’s FTSE also seemed rejuvenated by the bank holiday break, closing its first day back with a 2.2% – 94 point – gain to 4,337 points. However, elsewhere in Europe there was a 0.4% fall on Paris’ CAC and a full 1% reversal in Frankfurt on the DAX. Meanwhile, news of the need for more capital injections in most of the recently stress-tested US banks, pulled both the Dow Jones and Nasdaq in the US lower.