Brookfield has informed Grifols of the offer it is considering to launch the takeover bid. The Canadian fund, which is still carrying out the study on the company (Due Dillingence), has offered 10.5 euros for each A share of the company (those that have political rights as well as economic rights) and 7.62 euros for each B share (without political rights although in the case of an exclusion takeover bid they would have the right to vote). The values, which Brookfield claims include a 22% premium over the July 4 price, are lower than they were this morning (10.6 for A shares).
However, Grifols technicians will recommend that its Board of Directors reject the offer. “The Transaction Committee of the Board of Directors has concluded that a potential offer at this valuation level would significantly undervalue the company’s fundamental prospects and its long-term potential. Accordingly, the Transaction Committee would not be in a position to recommend to the Board of Directors to support a public offer by the Company at this valuation or to recommend to the Company’s shareholders the acceptance of a potential offer at the indicated price,” the company says.
The offer was made known after an official communication from Grifols to the CNMV. “As a continuation of the communication dated July 8, 2024 (registration number 2307), Brookfield confirms that, by letters dated November 10 and 11, 2024 addressed to the Grifols Transaction Committee (constituted by the Board of Directors of the Company on July 12, 2024), requested access to certain information to complete its exercise of due diligence. In these letters, Brookfield stated, as a non-binding indication of value, that it was considering a price of 10.50 euros for each Class A share,” the text begins.
This offer implies an assessment of the pharmaceutical company. The fund estimates that it would have to pay 6,450 million euros to close the operation, since 31% of the capital is in the hands of the family, with whom they have drawn up the exclusion takeover operation.
In any case, since Grifols ensures that these numbers are not definitive. “While Brookfield continues to engage positively with the Grifols Transaction Committee, at this time there is no agreement or decision regarding the potential offer or its eventual terms and conditions (including, without limitation, potential pricing). There is no guarantee that an offer will be made on Grifols shares. Any news will be communicated to the market in accordance with the provisions of the applicable regulations,” the company says.
Parallel movements
The novel between Brookfield and Grifols writes its last chapters. The private equity fund continues to analyze the operation and try to find the security barriers required by the net debt of more than 9,000 million that the pharmaceutical company carries. Certain information suggests that the Canadian entity has found banking support, specifically from Santander and Deutsche Bank, according to The Confidentialto refinance the next payments that the pharmaceutical company must face. This medium has not been able to confirm these statements with Grifols or Brookfield since they have declined to make any assessment.
The private equity fundbeyond covering itself against the debt, would now have to study the offer it wants to launch for 65% of the shares it intends to obtain. Amounts ranging between fourteen and fifteen euros per share are being handled, but there are also market sources who consider that this amount would not be enough and are betting that the operation will derail in the coming weeks.
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