This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

ISS Recommends Shareholders Vote AGAINST All Elan Proposed Transactions

Stocks in this article: ELN

NEW YORK, June 3, 2013 /PRNewswire/ -- Royalty Pharma today announced that Institutional Shareholder Services ("ISS"), a leading independent proxy advisory service, has recommended that Elan Corporation, plc (NYSE: ELN) shareholders vote "AGAINST" all items on the agenda for Elan's upcoming extraordinary general meeting ("EGM") on June 17, 2013.  This includes the Theravance Transaction, the AOP Orphan acquisition, the divestment of ELND005 and the $200 million share buyback.

ISS withheld issuing a recommendation on Royalty Pharma's all cash tender offer, but noted that voting against Elan's proposals "leaves the door open for shareholders to tender their shares if so they wish." 

Pablo Legorreta, Chief Executive Officer of Royalty Pharma commented, "We welcome ISS's recommendations regarding Elan's proposals.  We are not surprised that ISS has recognized that Elan's proposed transactions are not in the best interests of Elan shareholders.  Royalty Pharma's fully financed, cash confirmed $12.50 per share offer gives shareholders certainty and full value of their shares now, in stark contrast to the value destructive transactions proposed by Elan's Board and management.  We believe shareholders will welcome the opportunity to sell their Elan shares now and reinvest the cash they receive in companies with superior management teams."

In its report ISS made the following important points in issuing its recommendation that shareholders vote AGAINST all the Elan proposals:

  • "In aggregate, the inconsistent management of cash return to shareholders, the timeframe over which the Theravance, AOP Orphan and Newbridge transactions were negotiated, and the lack of a fiduciary out in the Theravance transaction, don't readily support a conclusion that this was a coherent process designed to create shareholder value. On the contrary, what they suggest is that the process may have been driven, instead, by the desire to avoid a takeover by Royalty Pharma."
  • "The Royalty Pharma offer ... certainly appears to offer more value for materially less execution risk."
  • "…the proposed [Elan] transactions are unlikely to be value accretive to shareholders, and their approval might well curtail other strategic options which could bring higher value with materially less execution risk…"
  • "The absence of a 'fiduciary out' from the Theravance contract is concerning. This means that the Elan board must stick to its recommendation for the transaction, even if it were to believe at some point that the offer from Royalty Pharma had become compelling."

J.P. Morgan, together with its affiliate J.P. Morgan Cazenove, BofA Merrill Lynch, together with its affiliate Merrill Lynch International, and Groton Partners are acting as financial advisers to Royalty Pharma. Capitalized terms used but not defined in this announcement have the meaning given to them in Royalty Pharma's Revised Offer Document dated 23 May 2013. 

1 of 6

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs