LONDON - Elan, the embattled Irish drug company, said on Monday that an unsolicited takeover bid by Royalty Pharma had lapsed because Elan’s shareholders had voted in favor of a share buyback plan.
Elan, which has been defending itself against the Royalty Pharma approach, said shareholders at an extraordinary general meeting voted against three recent purchases, but because they also voted in favor of the share plan, Royalty Pharma’s $6.7 billion offer would end. Royalty Pharma’s offer depended on all four transactions being rejected, Elan said.
The vote poses a challenge to Royalty Pharma’s plan, but it is unclear whether it does mean the end of the takeover effort. The company, which twice increased its offer price for Elan and took it straight to Elan shareholders, is challenging a decision by the Irish Takeover Panel that would require the company to abandon its offer after Monday’s shareholder vote.
In another twist, Elan put itself up for sale last week, saying it had received other expression of interests for its business.
In an open letter to Elan’s directors, Royalty Pharma’s chairman, Rory Riggs, wrote on Monday that he was “disappointed†that Elan’s board and its advisers “rejected our advisers’ efforts to engage with you this past weekend.â€
He welcomed that Elan was now contemplating a sale, but he urged the company to work with Royalty Pharma “rather than undertaking a lengthy, and we think likely fruitless, effort to find a buyer willing to offer more than we are.†Mr. Riggs called Elan’s recent transactions “hastily arranged†and “value-destructive.â€
Elan agreed to a $1 billion royalty deal in May with Theravance and also bought AOP Orphan Pharmaceuticals, which specializes in rare diseases. Elan also said it would spin off its treatment for bipolar disorder into an independent company called Speranza Therapeutics.
