Elan shareholders approve $8.6-bn takeover by Perrigo
18 Nov 2013
Shareholders of Irish biotechnology major Elan Corp Inc today approved the sale of the company to US over-the-counter (OTC) pharmaceuticals firm Perrigo Co, clearing the way for the deal to be completed by the end of the year.
In late July Elan's board approved the $8.6 billion buyout offer made by Perrigo, bringing an end to the multiple hostile takeover attempts by US investment firm Royalty Pharma. (See: US drugmaker Perrigo buys Irish biotechnology major Elan for $8.6 bn)
Perrigo offered to pay $6.25 in cash and 0.07636 shares of New Perrigo, a newly-formed Irish company for the purpose of the transaction, for each Elan share, valuing it at $16.50.
Perrigo shareholders will receive one share of New Perrigo for each share they own upon closing and $0.01 per share in cash.
On closing of the transaction, Perrigo shareholders will own approximately 71 per cent of the combined company while Elan shareholders will own the remaining 29 per cent.
The acquisition will create a premier global healthcare company with its headquarters in the Republic of Ireland, where corporation tax is about one-third at 12.5 per cent compared to 35 per cent in the US.
Dublin, Ireland-based Elan is a leading biotechnology firm, which has major interests in the US. It was formed as a private company in 1969 and became a public limited company in 1984.
Elan's blockbuster drug Tysabri, which is used in the treatment of multiple sclerosis earns a 12-per cent royalty on global sales which will rise to 18 per cent from 1 May 2014 and is expected to provide sustainable cash flows.
Michigan-based Perrigo, established in 1887, develops, manufactures and distributes OTC and general prescription drugs, infant formulas, nutritional products, dietary supplements and other products. The company's primary markets are spread over the US, Israel, Mexico, the UK, India, China and Australia.
New Perrigo, which has been formed as a private limited company in Ireland for the purpose of execution of the merger deal, will later be converted into a public limited company under the Irish Companies Act.
New Perrigo shares are expected to be listed on the stock exchanges of New York and Tel Aviv.