On the face of it it is a great deal for THRX investors:
At 21% of 15% of Breo sales, Elan will take home 3.15% of Breo sales. If Breo could hit $3 billion in sales, that's $94.5 million annually, not too shabby a return on its $1 billion investment. Of course, it'll take years to reach that level. The return in the initial few years is going to be paltry, and Elan really needs the other drugs to get approved to justify the investment.
What many unhappy 'individual' or small institutional investors feel about this deal, it is irrelevant!
What matters is that there is one gigantic institutional investor that has profited handsomely from this deal.
As I've said before, I follow Seth Klarman on this one. Won't sell till he does (albeit 10 days later). And as far as shareholder approval goes, it is an issue considering the talk is that ELN overpaid (may or may not be true... i doubt it). But really, it's the big boys that hold control over the vote. Just take a look at the institutional ownership of ELN. I'll be curious what they say about it. But either way, it presents opportunity. If it's voted down, then I'll pick up a few more shares....assuming baupost is still long.