After confirming an unsolicited takeover bid from privately held investment firm Royalty Pharma in late February, Ireland-based Elan (NYSE: ELN ) announced today that its board has unanimously rejected the offer.
According to Elan, Royalty Pharma's offer, via its subsidiary Echo Pharma Acquisitions, was for "$11.25 or less" for each outstanding share of Elan stock. The deal valued Elan at approximately $6.7 billion.
Elan is advising its shareholders to "take no action in relation to the Echo Pharma Acquisition Limited [Royalty Pharma] offer" until Elan communicates with shareholders after the publication of Royalty Pharma's formal "offer document."
"The offer from Royalty Pharma grossly undervalues Elan's current business platform and our future prospects. As a result the Board unanimously and without reservation rejected the offer," Elan Chairman Robert Ingram was quoted as saying.
Last week, Elan concluded a Dutch auction to buy back some of its own shares, ending up accepting for repurchase 88.9 million shares, representing 14.8% of its existing issued shares, at a price of $11.25 per share, for an aggregate purchase price of $1 billion.
Royalty Pharma had originally offered $11 per share and said it might increase that after the Dutch auction. It confirmed Thursday that its offer price was $11.25 per share.