In a surprising move, Johnson & Johnson had cut its shareholdings in Elan Corp. The move of the healthcare firm that may have implications on the US$7.3 billion takeover of for the Irish pharmaceutical firm.

Royalty Pharma had presented an improved offer of US$12 per Lean share. Previous offers from the investment firm have been rebuffed, with Elan seeking to remain as an independent company.

This offer of Royalty Pharma though is dependent on the outcome of the US$1 billion share buyback offer made by Elan. Royalty had already urged fellow Elan shareholders to sell their shares at US$11.75 and US$12 per share and gave a warning that should they not heed their call, the offer on the table for the takeover would be significantly reduced.

Elan for its part though have been able to buy back the targeted volume of shares priced at the lowest tier of the given peice range. Nearly 92.3% of those shares bought back were form Johnson & Johnson.

J&J did not provide a reason for its divestment but said it would be gaining US$213 million for its 2008 investment. The shareholdings in Elan though have fallen from 18% to 4.9% with the share buy backs.