Elan Corporation, plc (NYSE:ELN) today announced that its board of directors has rejected a revised bid from privately held investment firm Royalty Pharma.

Elan Corporation

Irish biotechnology firm Elan Corporation, plc (NYSE:ELN) said its board has rejected the offer from Royalty Pharma, through its subsidiary Echo Pharma Acquisition Ltd, to acquire all of the shares of Elan Corporation, plc (NYSE:ELN) for $13.00 plus up to an additional $2.50 per share in contingent voting rights (CVR).

What Elan Corporation Indicated:

The biotechnology firm Elan Corporation, plc (NYSE:ELN) indicated in a statement the gap between the underlying value of Elan Corporation and the totality of its business platform, and stated that the Royalty Pharma bid remains significant and hence the cash and CVR offer continues to be wholly inadequate for the Irish firm’s shareholders.

Royalty Pharma first made its proposal during February to acquire Elan Corporation, plc (NYSE:ELN) for $11 per share, which was revised several times. Royalty Pharma made its offer before Elan Corporation, plc (NYSE:ELN) agreed to sell its stake in multiple sclerosis drug Tysabri to biotech company Biogen Idec Inc. (NASDAQ:BIIB) for $3.25 billion in upfront payment.

The circumstances under which the CVR payments from Royal Pharma would be triggered would result in the higher end of the value range for TYSABRI as detailed by Elan Corporation, plc (NYSE:ELN) on May 29, 2013.

The Irish biotechnology company Elan Corporation, plc (NYSE:ELN) said today its board and executive management remain unanimous in recommending four previously announced transactions: Theravance royalty participation, addition of AOP Orphan business, divestment of ELND005 asset to Speranza Therapeutics and $200mm share repurchase.

According to the Irish company’s board, the four transactions would simultaneously improve the profit, diversify the business and allow the Irish biotechnology company to gain exposure to mid-to-late stage pipeline.

Elan Shareholders Offered To Vote Against Proposals

On the other hand, Royalty Pharma urged Elan Corporation, plc (NYSE:ELN) shareholders to vote against all four proposals, citing recommendations from proxy advisers Institutional Shareholder Services and Glass Lewis.

Elan Corporation, plc (NYSE:ELN)’s financial advisors are Citigroup Inc (NYSE:C), Davy Corporate Finance, Morgan Stanley (NYSE:MS) and Ondra Partners. Its legal advisors are A&L Goodbody and Cadwalader, Wickersham & Taft LLP. Royal Pharma’s advisors are JPMorgan Chase & Co. (NYSE:JPM), Bank of America Corp (NYSE:BAC). and Groton Partners.

Earlier on Sunday, Royal Pharma urged a federal court in New York to allow it to proceed with a potential $8 billion bid for the Irish drug company.

The proposals would be voted on during the Extraordinary General Meeting scheduled on June 17.