After confirming an unsolicited takeover bid from privately held investment firm Royalty Pharma in late February, Ireland-based Elan (UNKNOWN:UNKNOWN) 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.


Fool contributor Tim Brugger has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.