Elan Corp. (ELN) shareholders approved management’s plan to buy back $1 billion of stock after selling the company’s stake in the Tysabri multiple sclerosis drug to Biogen Idec Inc. (BIIB:US)
The repurchase was approved at a shareholder meeting today, the Dublin-based company said in a statement. The move follows a dividend proposal and plans to buy additional drug assets unveiled in February and will help investors to benefit from the proceeds of the deal with Biogen, which agreed to pay Elan $3.25 billion in cash plus future royalties for Tysabri.
Elan also faces a potential takeover offer from Royalty Pharma, a New York-based investment firm, which made an “indicative proposal” to buy Elan for $6.5 billion on Feb. 25. Royalty Pharma has until May 10 to make a formal offer or walk away, the Irish Takeover Panel said on April 3.
Royalty may sweeten the offer and include a contingent value right tied to Tysabri sales, Reuters reported yesterday, citing people familiar with the matter.
“Our policy is not to confirm or deny market rumors,” Tom Buchanan, a spokesman for Royalty Pharma, said in an e-mailed statement. “As previously stated by Royalty Pharma in response to the Irish Takeover Panel’s imposition of a May 10th deadline, we are currently considering all our options with regards to Elan. We have no additional comment.”
Elan shares were little changed at 9.01 euros as of 10:18 a.m. in Dublin trading.
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