Markets

Elan Stock Keeps Rising Despite Denial of BMS Takeover

By Jim Edwards

Updated on: June 2, 2009 / 11:04 AM EDT / MoneyWatch

Bristol-Myers Squibb dismissed it as "rumors and speculation." Elan declines to comment. And UBS says BMS has it has "confirmed" that it isn't happening. Yet Elan's stock continues to float on the idea that BMS is about to buy some or all of the company.

As the graphic shows (click to enlarge), Elan's stock rose from around 6.70 to more than 7.50 over the weekend after reports in the WSJ and Reuters on Sunday said BMS was considering a hookup with Elan.

But on Monday morning, both UBS and BMS poured cold water on the idea. Bloomberg:

"BMY has confirmed to us that it is not currently in talks to buy a minority stake in Elan," Roopesh Patel and Keyur Parekh, New York-based analysts for UBS, wrote in a report today.

Brian Henry, a spokesman for New York-based Bristol-Myers, said in an e-mail the company had "no comment on rumors and speculation."

The UBS quote leaves some wiggle room: it refers to a "minority stake" rather than an outright acquisition.

Elan has primed the market to believe it is a takeover target. It announced a strategic review in January that included a merger or sale. It was recently the subject of bogus rumors that Lundbeck wanted to buy it.

Anyone kicking the tires at Elan will want to ask some questions about the company's bizarre management structure. The top execs are based thousands of miles apart, in Ireland, Pennsylvania and California. The company just added a chief commercial officer -- in South San Francisco.

Renee Tannenbaum's new office is a mere 5,000 miles from CEO Kelly Martin's in Dublin. That's eight time zones away. Put another way, just as Tannenbaum arrives at her desk at 9 a.m. San Francisco time, Martin is turning out the lights in his Dublin office where it's 5 p.m.

Conspicuous by its silence is Jack Schuler's FixElan.com. The angry investor, who wants to see management ousted at the company, hasn't updated his site since February.