Elan Corporation, plc (NYSE:ELN) shareholders approved a share buyback program which would force Royal Pharma to end its unsolicited $6.7 billion takeover bid.

Elan Corporation

Elan Corporation’s Shareholders In Favor Of The Proposal

In the shareholders’ meeting at Dublin, Elan Corporation, plc (NYSE:ELN)’s shareholders voted in favor of a proposal to buy back $200 million in shares by using the proceeds of Elan’s sale to Biogen Idec Inc. (NASDAQ: BIIB).

Elan Corporation, plc (NYSE:ELN) earlier 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. Tysabri is Elan’s only revenue-producing product.

Under Irish takeover rules, however, the vote in favor also implied Royalty’s offer for Elan Corporation, plc (NYSE:ELN) up to $8 billion will lapse. The privately held investment firm Royalty Pharma is challenging that ruling.

Elan Corporation, plc (NYSE:ELN)’s shareholders also voted against three other transactions, including an investment in Theravance Inc (NASDAQ:THRX)’s royalties. Royalty Pharma’s offer has been contingent on investors rejecting all transactions proposed by Elan management, according to a ruling by the Irish takeover panel.

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

Elan Corporation, plc (NYSE:ELN)’s board earlier indicated that 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. 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.

The recent shareholder’s approval of buy-back offer may not end the New York-based Royal Pharma’s pursuit. Last Friday, the board of directors of the Irish drug manufacturer, Elan Corporation, plc (NYSE:ELN) finally approved the formal process to sell the company after receiving expressions of interests from different entities. The company also said that Royalty Management Llc (Royal Pharma) is invited to participate in the process.

Shareholders Have One Week To Decide

Royalty Pharma, through its subsidiary Echo Pharma Acquisition Ltd, proposed 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).

Elan Corporation, plc (NYSE:ELN)’s shareholders have a week to decide on whether to accept the offer, the investment firm’s third in five months. It requires the backing of 50 percent plus one share to go through, as well as a successful appeal in the courts.