Sunday 19 November 2017

Elan shareholders vote to accept €6.3bn takeover bid from Perrigo

Kelly Martin: Elan chief
Kelly Martin: Elan chief
John Mulligan

John Mulligan

Pharmaceutical firm Elan will disappear from the Irish corporate landscape by the end of the year after shareholders yesterday overwhelmingly backed the $8.6bn (€6.3bn) sale of the company.

Shareholders met in Dublin for a special meeting where they gave the green light to Elan's acquisition by US-based Perrigo. Perrigo's shareholders also voted yesterday to approve the transaction.

Perrigo agreed in the summer to buy Elan after the Irish company had been pursued in a hostile takeover attempt by another US firm, Royalty Pharma.

The takeover of Elan by Perrigo will result in the Irish company delisting from the Irish stock exchange. It also has a US listing that will be terminated. Perrigo shares are listed in New York and Tel Aviv, Israel.

Elan chief executive Kelly Martin will make more than $40m (€30m) from the deal.

Elan put itself up for sale in June in a continuing effort to thwart Royalty's hostile bid. That move came just before Elan shareholders rejected proposals from the firm that included a plan to invest $1bn to buy a 20pc stake of royalties from drugs produced by Theravance.

Perrigo will pay $6.25 in cash and is offering 0.07636 of its own shares for each Elan share. Perrigo shares were trading at $134.23 when the takeover plan was announced. They were trading at just over $152 in New York yesterday. Following completion of the deal, former Perrigo shareholders will own about 71pc of the enlarged entity while former Elan shareholders will own the remainder.

Perrigo gets access to a lucrative royalty stream generated from sales of multiple sclerosis drug Tysabri.

Elan sold its 50pc stake in the treatment earlier this year for $3.2bn (€2.3bn).

But it receives indefinite royalties from continuing sales of the drug, which is now wholly owned by US-based Biogen Idec.

Perrigo has previously said it will also significantly benefit from Ireland's low tax environment and will be headquartered here for tax reasons. The company will be able to write off profits against significant losses that have been accumulated by Elan.

Perrigo has estimated that it will benefit from annual synergies and tax savings of more than $150m (€111m) after the Elan purchase is sealed.

Irish Independent

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