The board of directors of Grifols has rejected the potential offer from the Canadian fund Brookfield Asset Management at a price of 10.5 euros per share and has recommended that shareholders not accept this price, which means valuing the blood products firm at 6,450 million, consider it low.
In July, the Canadian fund expressed its interest in carrying out a takeover bid jointly with the Grifols family with the ultimate goal of taking the pharmaceutical company private.
“A potential offer by Brookfield of 6,450 million euros for the entire outstanding share capital of the company (the sum of Class A and B shares) which implies an indicative price of 10.50 euros per share for class A shares , would significantly undervalue the company’s fundamental prospects and its long-term potential and, therefore, the Board of Directors would not recommend that the company’s shareholders accept a potential offer at the indicated price,” the company stated in a statement sent to the National Securities Market Commission (CNMV).
This was stated after the board of directors of Grifols met in an extraordinary manner this Tuesday without the intervention of the directors in conflict of interest and following the recommendation of its Transactions Committee.
Specifically, the company’s Transactions Committee “would not be in a position to recommend to the board of directors that it support a takeover bid for the company at this valuation, nor to recommend to the company’s shareholders the acceptance of a potential offer at the indicated price. “.
The Transactions Committee communicated this fact to Brookfield and requested that the extraordinary meeting of the council be called.
The company’s management body has met after receiving confirmation from the fund that it is considering a price of 10.5 euros “as a non-binding indication of value” for each of its class ‘A’ shares in the public acquisition offer (OPA) that it plans to launch together with the founding family on the Catalan company, which represents a premium of 22% over the securities listed on the Ibex 35 of the Spanish firm as of July 4, 2024 (date on which Grifols closed at 8.63 euros).
Likewise, Brookfield has advanced that it proposes a price of 7.62 euros for each type ‘B’ share of Grifols, which are the securities listed on the Continuous Market.
“There is no agreement regarding the offer”
Although the Canadian entity, through its British subsidiary Brookfield Capital Partners, has stated that it continues to interact “positively with the Grifols Transaction Committee”, it has acknowledged that “at this time there is no agreement or decision in relation to with the potential offer or its eventual terms and conditions (including, without limitation, potential prices)”.
“There is no guarantee that an offer will be made for Grifols shares. Any news will be communicated to the market in accordance with the provisions of the applicable regulations,” he confirmed.
Precisely this Tuesday, the judge of the National Court (AN) José Luis Calama has admitted a complaint from the Anti-Corruption Prosecutor’s Office against the bearish firm Gotham City Research, General Industrial Partners LLP (GIP) and several of its directors for, supposedly, launching the financial market “biased and misleading” information about the credibility of Grifols, in order to induce its investors to sell the shares of the Catalan company, causing a drop in the price that would generate a profit for both denounced commercial companies.
The company has lost about 30% of its market value since January, when bearish fund Gotham City Research accused Grifols of overstating profits and understating debt, which Grifols denied.
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