Elan Corporation, plc (NYSE: ELN) today announced the expected timetable of the separation of a substantial portion of its drug discovery business (the Prothena Business) into a new independent, publicly traded company, Prothena Corporation plc (Prothena). The separation will be effected pursuant to a demerger under Irish law.
Under the demerger, Elan will transfer the Prothena Business to Prothena in exchange for Prothena issuing directly to the holders of Elan ordinary shares and American Depositary Shares (ADSs), on a pro rata basis, Prothena ordinary shares representing 99.99% of Prothena’s outstanding shares. Immediately after the demerger (and conditional on prior completion of the demerger) a wholly owned subsidiary of Elan will subscribe $26 million and receive Prothena shares representing 18% of the total outstanding ordinary shares of Prothena (as calculated immediately following the subscription by Elan). The remaining 0.01% of Prothena’s outstanding shares, which were issued to the original incorporators of Prothena, will then be redeemed and cancelled. Accordingly, after completion of the transaction, Elan shareholders will directly and indirectly own 100% of the Prothena Business by virtue of their direct ownership of 82% of Prothena’s outstanding shares and indirect ownership of 18% of Prothena’s outstanding shares. Additionally, in connection with the reorganization of the Prothena Business which precedes the demerger, Elan is making a cash investment of $99 million in the subsidiaries holding the Prothena Business.
Elan shareholders approved a resolution in respect of the demerger at the Extraordinary General Meeting of Elan held in Dublin, Ireland on December 12, 2012. The occurrence of the distribution of Prothena ordinary shares in the demerger and the expected timetable set forth below is subject to, among other conditions to the demerger, the Registration Statement on Form 10 previously filed by Prothena with the Securities and Exchange Commission (SEC) in connection with the demerger having been declared effective by the SEC.