Options bid by board is blocked

IN what amounted to a rare display of shareholder muscle, the Elan board failed yesterday in its attempt to secure passage of a resolution, which would have increased its fundraising options.

The board managed to secure a vote in favour of just over 73%, just below the 75% threshold required to secure passage of the measure.

The directors’ ability to issue new shares and dilute existing holdings is restricted. The company can still engineer a rights issue, but will not be able to place its shares with selected institutions. The vote is a sign that relations between management and the shareholders remains uneasy and new chairman Garo Armen has a job of work to persuade everyone to come on board.