Brookfield plans to take control of Grifols in a $7 billion acquisition.
The Canadian fund’s preliminary proposal, which is subject to review, sets a price range with a lower limit of about 10 euros per share.
Brookfield posed The Grifols Family do public acquisition offer (takeover bid) about the manufacturer of blood products by price at least 10 euros per share to take control of the company and delist it from the stock exchange.as explainedSources close to the conversations consulted by EXPANSIÓN.
The Canadian investment giant and the Grifols family, which controls just over 30% of the group’s shares, Since last Thursday, they have been negotiating exclusively on the possibility of submitting a joint takeover bid for 100% of Grifols.
As part of the negotiations, Brookfield was hired as a financial adviser. lizardBye Goldman Sachs He is an advisor to the board of directors of Grifols.
The approach Brookfield has taken to the family is to eventually propose a joint takeover through Vehicle ad hoc into which the Griffols will contribute their shares, representing 30% of the group’s capital, with Brookfield as the controlling partner.
Premium not less than 25%
The price at which the offer will be launched has not yet been determined, although sources interviewed indicate that The Canadian fund is considering a fairly wide price range for the need to conduct due diligence. The lower range will be almost 25% above the Grifols price before the Brookfield deal.
This translates into offer from 10 eurosroughly, taking as a guide the 8.42 euros to 8.63 euros at which the blood plasma trader’s Class A shares traded on Wednesday and Thursday last week.
According to the sources interviewed, Grifols Class B shares must have the same price as Class A shares. in a takeover bid aimed at delisting the group from the stock exchange in accordance with Grifols’ articles of association, which resulted in valuation of 100% of the capital at around 7,000 million euros at the lower end of the range What Brookfield is thinking.
The fact that B shares are expected to receive the same valuation as A shares in a possible takeover explains why the former rose 21.43% on Monday compared to the latter’s 9.7%.
The final price, In any case, it will depend on the result of an in-depth analysis (due diligence) Grifols businessa process in which Brookfield and the Grifols family requested access to confidential information about the group from the company’s board of directors.
Grifols’ top governing body, which convened for an emergency meeting last Sunday afternoon to review Brookfield’s approach, has not yet decided whether or not to grant the Canadian fund access to the necessary documentationwhich will be determined in the coming days.
According to sources consulted, the blood product manufacturer’s recommendations is already working with Goldman Sachs to analyze the dealin order to protect the interests of all its shareholders.
nascent
Negotiations between Brookfield and the family are, in any case, still at a very early, almost primitive stage.Although talks between the two sides on the potential operation have been ongoing for months, with intermittent ramp-ups and ramp-downs, the two sides have been holding talks exclusively since Thursday.
The required testing for an operation of this magnitude has not yet begun. And talks about a possible partnership agreement between Brookfield and the Grifols family have not yet begun, so There is no guarantee that the operation will take place.
Sources indicate that if Brookfield retains its interest, a possible takeover bid he will still have a few “months” left, not weeks.
Grifols’ interest in delisting the family company from the stock market comes from afar. at least since then Two years ago, KPMG forced the group to restate its 2020 annual accounts.1 to understand how 840 million debt under the agreement with Singapore’s sovereign wealth fund (GIC).
An exception is when the company is overleveraged. commitment over 10,000 million euro, would allow the group free themselves from constant public scrutiny and be accountable only to their shareholders and not in front of the market as a whole.
A small reaction
He Gotham City Scandal This only increased the family’s desire for the Grifols to stop trading, especially after The group’s actions have been largely unaffected by the recent agreements with Haier for the sale of participation in Shanghai Raasand also with Apollo and Dubri (which is controlled by Brookfield) in relation to debt.
Brookfield is currently the white knight that the Griffols are clinging to in order to fulfill this wish.although the family would have ceded control of the operation to the Canadian fund, since it had no financial means to increase its stake in a group whose core business, despite all the accounting practices condemned by Gotham, has great value in the eyes of the funds, with an oligopolistic position in the market.
Some private equity giants, such as CVC, Cinven, Hellman & Friedman or KKR They were already interested in the company, but no agreement had been finalized yet. However, some of these firms managed to pass the mandatory business checks (due diligence) of the Grifols group.
The 75% target is the key to quickly and effectively eliminating the stock market.
In order to quickly and efficiently delist a listed company from the stock market through a public acquisition offer (takeover bid), such as that planned by Brookfield and the founding family for 100% of Grifols’ capital, the key is that the offer is approved by at least 75% of the shareholders participating in the takeover.
According to a legislative change approved in 2021, only if the offeror reaches these three-quarters of the capital will it be able to subsequently exercise the exception through a sustainable order to buy minority shares on the stock market at the same price as this price.
If it does not reach that level, but reaches the majority of the capital, Brookfield will be forced to call a shareholder meeting to vote to give up the shares, and then come up with a proposal to exclude. Only then will I be able to profit from the stock market.
Under Spanish law, which changed after KKR’s 2019 delisting bid for the Telepizza chain, once a delisting bid is approved at a meeting, stock market trading can be cancelled, regardless of the percentage of minority shareholders who attended the final offer.
In this scenario, minority shareholders who remain in the equity must be given one last opportunity with a firm order to purchase the remaining securities before proceeding with the exclusion.