Founding Family, Brookfield Consider Exclusive Takeover Bid
The National Securities Market Commission (CNMV) decided this Monday to suspend trading in Grifols shares as a precautionary measure. This was done with immediate effect, just 10 minutes before the opening of the European stock market and a few minutes after the biotech company itself had issued a statement through the supervisory authority in which it announced that the founding family (Grifols) and the British investment fund Brookfield were considering joining forces to buy the entire capital of the company and delist it from the stock market (both in Spain and the United States). The price was finally paralyzed for three hours, until 12:00 (Madrid time). This year, the price of its shares, listed on Ibex, has fallen by almost 42% due to the debt crisis and, above all, the crisis of confidence that erupted at the beginning of the year.
Yesterday, Sunday, July 7, an extraordinary meeting of the board of directors of the Catalan company took place. The reason was compelling: the founding family (the “Grifols family shareholders”, according to the CNMV notice) and Brookfield Capital Partners Limited asked to be allowed to see “certain information” about the blood product manufacturer.
The intention of Grifols and the investment fund is to carry out a Due Diligence procedure, that is, to thoroughly examine the real state of the group. They are considering making a public acquisition offer (takeover bid). compound for the entire share capital (100%) of Grifols.
“The purpose of the deal will be delisting companies if it is finally implemented,” the CNMV said in a statement this morning.
Grifols thus confirmed the news that was reported this weekend by various media outlets. Cinco Diaz even reported yesterday that a potential offer could be for 5.5 billion Euro.
Brookfield issued a statement after 11:30 a.m. (on mainland Spain), saying in a note to the CNMV that talks about a possible takeover were being held exclusively with “some benchmark shareholders” (and cites Scranton Enterprises, Deria, Ponder Trade and Ralledor Holding Spain).
“Not at the moment no agreement or decision regarding the potential transaction or its possible terms,” the investment fund adds. And it emphasizes: “There is no guarantee that Brookfield or its major shareholders will make an offer.”
The company’s board had previously assured the stock market regulator in a filing that it “did not know whether” the takeover bid would be carried out and that it was “entirely unaware of the terms on which, if applicable, it might be carried out.”
How Grifols’ capital is distributed
According to the CNMV, Santiago Grifols Ras owns more than 7.3% of the capital of the Catalan company; Enrique and Nuria Grifols Roura they have about 9.3%; and ScrantonGrifols’ investment company, which has played a key role in the controversies that have surrounded the biotech since early 2024 (and which are detailed below), holds more than 8.6% of the total 25.3% of shareholders.
In addition, according to the Grifols website, related shareholders and the board of directors own 30.4% of the share capital. Capital Research and Management Company And BlackRock These are the other two largest shareholders (with shares of 4.58% and 4.3%, according to CNMV data).
The Grifols have lost executive power at the company that bears their family name in recent months. Among other things, Raymond Grifols Rusa And Victor Grifols Deu In early February, they stepped down as corporate director and chief operating officer, respectively.
What was more important was that Nacho Abia On April 1, he replaced Thomas Glanzman as the biotech’s CEO, a surprise appointment that was announced in late February last year, the same day the company released its unaudited 2023 results (and when the stock fell 35%, the worst in its history to date).
The last significant movement among senior officials came just four days ago, when it was announced that Rahul Srinivasan He will become chief financial officer (CFO) in mid-September, replacing Alfredo Arroyo, who is set to retire soon.
2024, annus horribilis for the Grifols
Tuesday January 9, 2024 at 7:30 AM (Madrid time): It was this moment that marked the beginning of the fall of Grifols, one of the 35 companies listed on Ibex, the main selector of the Spanish stock market.
It was then that the analytics firm Gotham City Researchled by the mysterious Daniel Yu and famous for bringing down Gowex in Spain, has published its first report against the company, accusing it of defrauding its accounts over the past few years. Furthermore, the analysis suggests that Grifols shares should be worth €0.
Grifols shares were down 26% on the stock market that day (and even lost 43% on the day). Something that Great benefit of GIPa Gotham City-linked bear fund that took a short position in Grifols shares just a day before the controversial report was released, further fueling the corporate scandal.
The January 9 document was far from the only Gotham City document to incite Grifols. The second attack occurred February 20thas Gotham insists on how contradictory Grifols’ corporate structure is (see chart below), especially the questionable relationship between the firm and Scranton, one of its largest shareholders.
The offensive continued March, 6when Gotham made further arguments to claim the biotech was “teasing shareholders” with its results. Then came the unaudited balance sheet for 2023.
And now the final blow has been dealt. May 14 Last year, when analytics firm Justiciera (named after the city where the fictional superhero Batman lives) reported that it believed Grifols subsidiary BPC Plasma had wrongly lent Scranton €266 million.
The CNMV analysis concluded that There is no “evidence” to conclude that Grifols committed fraud. accounting, although it found “significant deficiencies” in its results in recent years and left open the possibility of imposing sanctions on the company.
Overall, confidence in the Spanish firm has plummeted since its creation this year. The three biggest rating agencies (S&P, Fitch and Moody’s) downgraded their credit note (or rating). And the stock market value also collapsed: by more than 40%. Grifols shares on Ibex began to cost in 2024 15,455 euros and on Friday they ended the session at €8.99.
The stock market’s intraday low for the year (so far) was recorded at 6632 euro On March 7, the annual collapse reached 67%.
Not even selling part of his business in Chinathe key to reducing the large debt, nor the net profit (21.4 million euros) in the first quarter of 2024 have given Grifols strength on the stock market. In this case, it seems that the heirs of the founders are increasingly aware that the time has come to take it off the stock market.