shareholders do not expect more than 11 euros in a takeover bid
Last week the pressure on the fund increased significantly Brookfield raise the advertised price by takeover bid O Grifolsbut the truth is that shareholders don’t expect much improvement; Reaching the level of 12, and even more so 14 euros per share, as was rumored, is excluded. There will be more competition for B shares, for which Brookfield is offering a much lower price than for A shares.
According to OKDIARIO, as part of investment banking The 10.5 euros quoted by Brookfield for A shares is not considered such a bad price. The reason is that if the offer is not accepted, the company will be forced to carry out a capital increase at a much lower price of 7 or 8 euros.
What’s more, we should be counting on the triumph that the Canadian fund holds: “Brookfield could present shareholders with a dilemma: accept this price or remain without a takeover bid and risk the value plummeting again in the future.” Bag” or the aforementioned capital increase, a source familiar with the situation said.
Recall that Grifols fell to the level of 6 euros after reports Gotham City and that it was below 8 before the takeover bid was announced in July. “In this scenario, 10.5 euros does not seem so bad,” the sources add.
Either way, they believe Brookfield is interested in pursuing the takeover bid, so it will raise the price slightly. For example, amazing views believes that a 20% price increase (which would push it to 12.60 for Share A) would allow the fund to maintain a 20% return.
However, the market suggests a much more discrete improvement: even 11 euros. To begin with, this analysis assumes that Grifols’ reports are correct – something Brookfield himself doubts and therefore extends his consideration. due diligence-. Secondly, it does not take into account the possible cost of breaking opaque relations with Scrantonholding company of the founding family. Moreover, the fund has the aforementioned ability to put Grifols shareholders between a rock and a hard place.
The fight will be in B.
Where the greatest battle will be is in type B shares, who charges dividends older, but have no political rights. Brookfield is offering a target price of €7.62 for these securities, a discount of 27.5% compared to the consideration stated for the A shares.
Here Brookfield faces another problem: the Grifols bylaws state that these shares are entitled to receive the same as A shares in the event of a delisting takeover bid, and in order to charge less, the bylaws must be amended when they positive vote (in which case they have political rights). This means that if the holders of B shares do not approve the change, the takeover bid will not go through.
As OKDIARIO also announced, these shareholders (mostly opportunistic funds that entered the market expecting a higher price in the takeover bid) will accept a small discount compared to A-grade securities: “They can raise it, but they have to be honest in relation to shareholders; Otherwise, the operation will fail and there will be consequences. At best they can offer a discount. fairLet’s say 5%. If they raise 15% or 20%, then there will be nothing to talk about,” said one of these investors.
According to sources, these shareholders want to receive at least 9 euros as part of the takeover offer. Now Brookfield may again present them with a dilemma: agree to a discount or be left without a takeover bid and, therefore, without the opportunity to sell their shares.
On the other hand, contacts with sovereign and pension funds promoted by this newspaper are beginning to bear fruit. According to some media reports, the sovereign wealth fund Singapore and the government’s state pension fund Canada (CPPIB), are ready to take part in the takeover bid for Grifols and thus reduce ticket from Brookfield.
Finally it remains to close financing operation, within which the fund wants to include the restructuring of the Grifols debt (9.208 million net at the end of September, according to official data). According to OKDIARIO, some of the company’s main creditors such as CaixaBank or Sabadellthey are not going to participate and Santander He wants to finance only a small percentage of the share price (i.e. apply a large discount), although he raised it from 50% to 60%.
In any case, the bulk of the loan for the operation will be provided by foreign banks, among which Deutsche Bank, BNP Paribas, Bank of America or JP Morgan.