Brookfield persuades Temasek and GIC to join Grifols takeover bid

Brookfield takeover proposal by the Grifols family The delisting of the Catalan pharmaceutical company from the stock market continues. The Canadian Foundation has already secured sufficient financial support for contribute capital to a public acquisition proposal that is still being studied, despite the fact that the price for a possible offer he succeeds far from the company’s expectations. Thus, the investment group already has two Singapore sovereign wealth funds: Temasek And Singapore Government Investment Corporation Private Limited (GIC)which will contribute $3 billion in capital, according to El Confidencial.

Plans to search for Brookfield have been activated for months. In August, Bloomberg reported that the Canadian group was in talks with another Abu Dhabi-based sovereign wealth fund, ADQ, outside of GIC. The move is a response to the need to add “equity” to the proposal, which would require the company to pay an estimated more than $4 billion for the 65% of capital that is not in family hands.

The amount to be paid out exceeds the “ticket” that Brookfield typically puts its funds into a single asset, so it had to seek support from other financial investors who typically co-invest in large operations.

Once this mystery is cleared up, there are still some aspects to be clarified before the takeover bid is officially announced. One of them is the refinancing of the debt of a derivatives firm amounting to 11 billion euros.for which it is necessary to reach an agreement with a pool of banks led by Banco Santander and Deutsche Bank. Organizations such as Société Générale, HSBC, CaixaBank, BBVA and Sabadell are far from joining this plan.although other companies with larger balance sheets could do so (mainly Bank of America, JP Morgan, ING and BNP Paribas).

The next hurdle is the legislative change required to equate shares A and B (without political rights), which currently trade at different prices and distort the uniform supply of the Canadian investor. Brookfield asks to pay less for shares B, for which it is necessary to eliminate the right of redemption assigned to them in the event of an alienating takeover bid

. In the absence of formalization, this obstacle appears to have been overcome as the Family Plan and the Canada Foundation is to unify these names in the future, as this newspaper explained.

In a different area, but also among the relevant aspects of completing the due diligence process. There are transactions between the Grifols and Scranton, the vehicle of the Grifols family.. In recent weeks, Brookfield has asked for more information on the matter.

Evaluation in Focus

Without a doubt, agreeing on how much Grifols is worth is the biggest headache for all parties. The blood products company has rebounded in the stock market in recent months, although it is still far from the levels it was trading at before the Gotham City bearish investor attacked. accused now in the National Court following the publication of various reports on the company’s financial condition that allegedly contained misleading and false information.

For now, Brookfield passed on an optional price target of €10.5 for each pharmaceutical A share and €7.62 for each B share.. In both cases, this represents a premium of 22% relative to the price on July 4, when the interest was exceeded and officially recognized by the National Securities Market Commission (CNMV). This assessment is not sufficient for the independent committee that oversees the company’s takeover bid, as well as for the board of directors.

which met urgently – without the intervention of directors in conflict of interest, that is, representatives of the Grifols family – to convey its position to the stock market supervisory authority.