Elan-Pfizer Deal Rumor Is Deja Vu All Over Again

(MoneyWatch)  Elan got back on the takeover merry-go-round again today, with its stock rising on rumors that Pfizer might be interested in buying the company. Elan investors had just gotten off that ride a few days ago with the news that Bristol-Myers Squibb and Lundbeck were not, in fact, trying to buy the company.

As Reuters noted in an excellent piece, Elan has prevented itself from being taken over despite the fact that it launched a "strategic review" to look at just that:

Due to two partnership agreements, Elan cannot sell itself outright or sell a majority stake without losing rights to its two most lucrative products.

That makes it less attractive for a would-be suitor to pay a hefty price for only a small portion of Elan that gives it no control over the asset.

The two partnerships are with Wyeth for Alzheimer's drug bapineuzumab and Biogen which comarkets Tysabri for MS.

The Pfizer rumor has a little more credibility than the Lundbeck and BMS ones did because as Pfizer now controls Wyeth, it controls half the equation at Elan. Problem is that it doesn't control the other half. Biogen just emerged from a proxy war with angry investor Carl Icahn gaining a seat on its board.

Icahn usually likes to sell underperforming companies for a premium on the stock. This raises the question of whether Icahn now has a finger in something that Pfizer CEO Jeff Kindler thinks might be worth the price.

If Pfizer is talking to Elan, it would be a reversal of the position in January when Elan CEO Kelly Martin said he was not talking to Pfizer. What could have changed? Pfizer's ownership of Wyeth, for one.

Next obvious move: Kindler, Icahn and dissident Elan investor Jack Schuler get together in one room and figure out how they can slice this pie. Likely to get the knife: Elan's crazy management, whose seemingly pointless hiring of Citigroup to conduct a takeover review for a company riddled with poison pills preventing just that is, arguably, yet another example of its profligacy.

• Previous BNET coverage of Elan:
• Elan Stock Keeps Rising Despite Denial of BMS Takeover
• Elan Silent on Corporate Jets as 230 Are Laid Off
• Elan Management Creates Self-Enrichment Plan as Pfizer-Wyeth Deal Threatens Bapineuzumab
• Elan Chairman: "We're Qualified Managers Because We're Irish"
• Elan Sees Problems on Alzheimer's Drug; Puts Itself Up for Sale
• Elan "Poison Pill" Deal With Biogen Prevents Rumored Pfizer Takeover
• Elan's Pennsylvania Lawyer Once Again Makes News
• Elan CEO Martin's Pay Cut by Half

Image by Flickr user blmurch, CC.