Today's Economist: Getting the Fed to Explain Itself Better

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DealBook: Elan Puts Itself Up for Sale

11:27 a.m. | Updated

LONDON – Elan’s battle to fend off a hostile bid by Royalty Pharma of the United States took a new turn on Friday when it decided to put itself up for sale.

The step comes four months after Royalty Pharma first made an offer for Elan, the Irish drug maker, challenging the company’s stand-alone strategy. Royalty Pharma sweetened its hostile takeover offer for Elan this month for a second time to $13 for each Elan share and an option to receive as much as $2.50 a share extra. Elan rejected the offer as too low. Shares of Elan jumped 8.7 percent in trading in Dublin after the announcement.

But on Friday, Elan said that it would put itself up for sale “in light of the expressions of interest received to date” and that “Royalty Pharma will be invited to participate if they so wish.” Elan said on Monday that it had received several unsolicited inquiries about its business.

“Elan board and management are aligned in maximizing the full value potential of the business on behalf of its shareholders,” Elan said in a statement. “We will update the market as appropriate.”

Royalty Pharma reacted to Friday’s announcement by reiterating its latest takeover offer, adding that “Elan shareholders should realize that Elan has only announced a sales process because of Royalty Pharma’s offer.”

Royalty Pharma’s offer for Elan, which Elan said its shareholders should reject, values the company at $6.7 billion, or $8 billion including the options. Royalty Pharma increased its offer after only 7.5 percent of Elan’s shareholders accepted the earlier proposal.

Elan shareholders are scheduled to gather for an extraordinary shareholder meeting on Monday to vote on four acquisitions that Elan negotiated after Royalty Pharma’s initial approach. Royalty Pharma has been critical of the value of the transactions and said its offer for Elan would lapse if Elan shareholders approved the transactions.

Citigroup, Davy Corporate Finance, Morgan Stanley and Ondra Partners are advising Elan on the decision. A&L Goodbody and Cadwalader, Wickersham & Taft are providing legal advice.

Advertising: FleishmanHillard Rebrands Itself, With a 21st Century Focus

Fleishman-Hillard, which was founded in 1946 as Fleishman, Hillard & Associates, will rebrand itself this week as FleishmanHillard, with elements that include a new logo and a new slogan, “The power of true” — no relation, presumably, to “Truth well told,” the slogan of McCann Erickson Worldwide, or “Truth and design,” the slogan of MediaVest.

Truth be told, the changes at FleishmanHillard — with worldwide revenue of more than $500 million and 2,500 employees in 84 offices — are meant to signal how it is striving to become an integrated marketing communications agency that offers services like advertising and social media marketing in addition to public relations.

“ ‘True’ is the central concept we’re rebranding on, to deliver on our promises to be the trusted adviser to guide you through the maze of choices,” said Dave Senay, president and chief executive at FleishmanHillard in St. Louis, which since 1997 has been part of the Diversified Agency Services division of the Omnicom Group, the world’s second-largest agency holding company after WPP.

“It’s not that we’re going to become an ad agency,” Mr. Senay said, adding: “We’re moving into a different space. The vision is to be the most complete communications company in the world. Somebody’s got to be able to put it all together.”

FleishmanHillard will seek to be “channel agnostic,” Mr. Senay said, an industry term meaning to be objective about the various forms of communication, whether paid, owned, earned or shared, to reflect “how the public consumes media today.”

To that end, the agency is hiring a former longtime journalist, Pat Wechsler, as senior vice president and director for editorial and corporate content strategy, working in realms like content marketing, which provides consumers editorial and entertainment articles and video clips that marketers sponsor.

He was hired after FleishmanHillard had brought in scores of the types of employees who are more typically found at consultancies, brand identity businesses or ad agencies, among them analytics specialists, planners, copywriters and art directors.

FleishmanHillard “wasn’t even on my radar,” said Nick Childs, an executive creative director in the agency’s New York office who arrived in 2011 after working at ad agencies like Grey.

“I had a chance to take a risk and do something unique at a big agency that could be a key partner to brands,” he added, “not just pushing out at an audience what a brand wants to say.”

Richard Dale, senior vice president, senior partner and global planning director, who also joined FleishmanHillard in New York in 2011, said that after working for ad agencies like Leo Burnett “I was looking for something different” and became intrigued by the concept of FleishmanHillard’s “transforming into a total communications resource.”

Although “the journey is just beginning at FleishmanHillard, and we still have a lot to do,” he added, “the firm is being given the tools, and it’s proving so game-changing.”

Reflecting the broadening of the services offered by FleishmanHillard beyond public relations, the agency last year placed more than $1.2 billion worth of ads in paid media, compared with $250 million in 2011.

“A lot of things have changed in consumer product marketing, especially the multiplicity of channel options,” said Mike Brooks, executive director at the William K. Busch Brewing Company in St. Louis, which hired FleishmanHillard to create television, radio, outdoor, online, retail and social-media ads to introduce two beers, Kräftig Lager and Kräftig Light.

Asked to assess the work, Mr. Brooks paused to declare, “I’m not on a P.R. campaign for FH,” then said: “I am happy to report thumbs up in every regard. The creative and the messaging are well received. And we have one quarterback of all the disciplines, Tom Hudder, an executive creative director, ensuring everything is consistent.”

FleishmanHillard is, of course, not the only agency reassessing its operations in light of the profound changes in marketing and media. Large competitors like Edelman, part of Daniel J. Edelman Inc., and Weber Shandwick, a unit of the Interpublic Group of Companies, are also reworking their service offerings.

“It’s exciting if we look at it as different opportunities, new opportunities, to be creative,” said Mark O’Brien, president at the DDB North America division of DDB Worldwide, an Omnicom ad agency. “Persuasion is an art, not a science.”

Because of innovations like social media, the model has evolved from “trying to connect people with brands” to “trying to connect people with people to connect with brands,” he added. “Agencies that have made an effort to bring in fresh talent are getting hotter.”

Mr. Senay said rough patches are likely during the transition. For instance, referring to the employees who have worked on public relations assignments at the agency, he said, “about a third are turned on by” the new vision, “about a third will go along with it and about a third will not get it.”

To promote its new identity, FleishmanHillard is introducing a quarterly digital magazine, FleishmanHillard True. And a television, print, outdoor and online ad campaign that is being created internally, with a budget estimated at $750,000, is to begin this week. “Be as you wish to be seen,” a 15-second commercial proclaims.

With E.C.B. in Spotlight, Bundesbank Finds Itself in the Shadows

Built 45 years ago, the modernist building is hardly old by European standards, yet it is a temple to tradition, embodying the ethos of this most conservative of institutions. “We are trying to keep it just the way it is,” said Reiner Bruckhaus, head of the bank’s centralized construction management division.

That starts with the granite floors, the Barcelona chairs in the lobby (designed by the Bauhaus great Ludwig Mies van der Rohe), and the grand, white Carrara marble by the elevators, and goes all the way up to the wood grid ceilings on the top floor. “You will find not even the slightest changes,” Mr. Bruckhaus said.

When the building was erected in 1967, the Bundesbank’s dominance in European monetary policy went unchallenged. But in the hazy distance of the Frankfurt skyline, significant change is evident in the outline of two towers and three cranes, the new headquarters of the European Central Bank — a visible reminder of the institution that has supplanted the Bundesbank, just as the euro replaced the German mark.

European leaders established the European Central Bank’s headquarters in Frankfurt as a symbol of its status as heir to the Bundesbank. But the danger posed by Europe’s continuing debt crisis demanded improvisations at odds with the Bundesbank’s conservative teachings.

Over the summer the E.C.B.’s president, Mario Draghi, pursued an expansive policy that was anathema to the old guard, whose cause was championed by the Bundesbank’s youthful president, Jens Weidmann. He and his supporters base their views not, they say, on rigid orthodoxy but on experience gleaned from the disaster of hyperinflation and the success of adhering to a hard-money path.

In an increasingly uncomfortable pairing, the Bundesbank functions as the largest piece of the E.C.B. puzzle. With more than 9,500 full-time workers, the Bundesbank dwarfs the 1,600-strong central bank. Because of that limited staff, the E.C.B. depends on the Bundesbank to handle many of the back-office functions of the common currency.

But the European Central Bank’s influence continues to grow. Euro-zone finance ministers agreed to a deal Thursday to put 100 to 200 of their largest banks under its direct supervision.

The arranged marriage between the two banks will take enormous effort and flexibility. As its massive headquarters suggests, the Bundesbank is capable of enormous and sustained effort, but flexibility may be inimical to its nature.

Founded in 1957, the Bundesbank quickly grew into one of Germany’s most respected institutions. The rank-and-file behind Mr. Weidmann, 44, represent an unusually tight-knit group, almost like a monastic order, and they are steeped in the bank’s secular religion — often at the bank’s own school, a kind of Hogwarts for its future financial wizards, in a hilltop 12th-century castle in the town of Hachenburg.

“You hear it in the first lecture,” said Silke Frühklug, 32, a graduate and Bundesbank employee. “You hear it in the last lecture and every day in between: price stability.”

Ms. Frühklug married a classmate and in her free time plays on the central bank’s badminton team, which on a recent evening practiced in a gymnasium on the Bundesbank campus right after the handball team. The bank also has a theater society and “hobby artists” club, which exhibits in the lobby of the headquarters. It owns apartments for workers in tight real-estate markets like Munich and here in Frankfurt. Retired employees still lunch at the cafeteria, helping to nurture the all-important continuity.

“People feel connected with the goals of the bank,” said Matthias Endres, 43, editor of the Bundesbank’s internal magazine. Like Ms. Frühklug, he married a fellow graduate from the school in Hachenburg. He has vacationed with his wife and their three children at all three of the Bundesbank getaways, on the North Sea, in the Black Forest and on a lake in Bavaria.

Mr. Endres’s wife, Simone, works part-time in the headquarters’ Money Museum, which houses some 350,000 objects, of which roughly 1,300 are on display, including the worthless bills in denominations of millions and billions from the hyperinflation of the Weimar-era and examples of commodity money, like a gold bar, a tea brick and even a preserved cow standing near the entrance, a silent bovine greeter.

Jack Ewing contributed reporting.

NBC Finds Itself in Unfamiliar Territory: On Top

Numerous unexpected factors have played a role in this surprising turnaround, some of which are not likely to last, but the numbers are clear. Among the viewers prized by most advertisers — 18- to 49-year-olds — NBC has beaten its network rivals every week of the new television season.

That’s three weeks, and NBC is in contention to post a fourth victory when the Nielsen accounting is official on Tuesday. (CBS, as it has for years, remains well ahead in terms of the total number of viewers.)

NBC’s ascent is the most striking development of the season, but it goes hand in hand with a wider story of network performance that, NBC aside, has ranged from disappointing to alarming.

While NBC has managed to increase its 18-49 number an impressive 15 percent, ABC is down 12 percent, Fox is down 19 percent and CBS — which had a huge start last fall because of curiosity surrounding the departure of Charlie Sheen from “Two and a Half Men” — is down 24 percent from the three-week period a year earlier.

The two developments are linked: NBC has been able to ascend at least in part because its competitors have descended so sharply.

Even at NBC, few people expected this performance. “We didn’t dare dream we’d win the first three weeks of the season,” said Stephen B. Burke, the NBC chief executive. “We were pretty sure we would do better, and had laid the groundwork and had the strategy to do better.”

Robert Greenblatt, in his second season heading NBC’s entertainment division, said, “I was hoping we’d be out of fourth place and comfortably in third. But we’re comfortably in first.”

NBC came into the season with a limited strategic objective. “Our big goal was to build one night a year,” Mr. Burke said.

With National Football League games making Sunday night an all-but-guaranteed win, the idea was, “O.K., we’d like to try to win Monday night,” Mr. Burke said. “And we’ll try to be competitive on Tuesday.”

Thus far, NBC has won every Monday and Tuesday to go along with its football-fueled Sunday.

The crucial decision was adding a second edition of the hit singing competition, “The Voice,” on Monday to complement the version that ran in the spring. “There were people saying we brought it back too soon,” Mr. Greenblatt said.

The outcome of that move has yet to be determined.

“This is the first time a singing competition is going to have two arcs in the same season,” said Brad Adgate, senior vice president of research for the media-buying agency Horizon Media. Fox’s “American Idol” has always stuck to one edition a season.

But “The Voice” has continued to be a potent draw, easily eclipsing Fox’s fall-season singing show, “The X Factor.”

The other essential ingredient in NBC’s early success has been the addition of the season’s only breakout hit, “Revolution.” That drama, about a postapocalyptic world without electrical power, has not only dominated its 10 p.m. Monday time period, it has added more than 50 percent in the 18-49 audience when delayed viewing is included.

Mr. Greenblatt said that having two hours of “The Voice” on Monday would not have been enough to turn the night around if NBC had not developed a show that could take advantage of that big lead-in audience. “You have to have a show that the audience truly wants to watch,” he said.

At this point last season, NBC’s Monday consisted of two hours of “The Sing-Off” and a new drama, “The Playboy Club.” That lineup averaged 4.4 million viewers and a 1.6 rating in the 18-49 audience. This year’s lineup has averaged 11.3 million viewers and a 4.2 rating.