The investment bank believes that 10.5 euros is a good price for Grifols

Advice Grifols rejected on Tuesday price approximately 10.50 euros, announced Brookfield for possible takeover bid exceptions on the grounds that it undervalues ​​the company. However, professionals in investment banking They have a very different opinion: they believe that this is a more than reasonable price, especially compared to the alternative to a takeover bid, capital increase. According to one of the companies, in this case “the market will not pay more than 7-8 euros.”

“With 10 billion millions duty“Paying more than 11 euros would be strange,” adds another investment banking specialist. It should be remembered that Brookfield will have to refinance this debt at an appropriate cost as part of the transaction, as well as dismantle the network of shareholders between the company and Scrantonholding company of the Grifols family.

In fact, OKDIARIO has already reported this. That

City I expected a low price in a possible takeover bid because the venture funds They examined the company and ruled out the possibility of entering it, and the only one who decided to do due diligence (in-depth analysis of accounts) was Brookfield.

The first source accurately explains that the founding family “can successfully get by with 10.5 euros because they define the lower limit for the action.” The capital increase on the market would be around 7-8 euros and would have diluted many”.

“It is logical that Brookfield does not offer a price above the market price because it pays survival bonus. He proposes to investors to save the company and give them a way out, rather than continue as it was, and return the shares to at least the prices before the takeover announcement, below 8 euros,” adds a third party.

With the added risk that the biopharmaceutical company will not be able to repay its debt as it continues to generate negative box (more money is going out than coming in), although the situation has improved in recent quarters. To balance its balance sheet, it is likely that Grifols will have to undertake a capital increase, the price of which will be much lower than that of a takeover bid.

For the B shares (which pay more dividends but have no political rights), Brookfield is offering €7.62 as a provisional price, which these shareholders are not willing to accept and would require a change in the Grifols articles of association, entitling them to receive the same amount , as shares A-…, which must be approved by these shareholders. They would be willing to accept a small discount, but by no means such a difference as the one offered yesterday.

Brookfield’s difficulties

As reported by OKDIARIO, Brookfield is facing great difficulties in financing the acquisition deal and restructuring the debt of the Catalan company. A few important creditors from Grifols such as CaixaBank and Banco Sabadellthey are not going to participate in the operation, and those who wish will provide the fund with a loan of only 50% of the offer amount (maximum 60%).

Funding is another obstacle—and one of the most important—among the many setbacks OPA faces. On the one side, due diligence (an in-depth review of accounts) that Brookfield began in July and during which it discovered “strange things” in the reporting of its subsidiary in China

.

Moreover, before the publication of quarterly results, the fund requested information from the company about the relationship between Grifols and Scrantonright at the center of criticism Gotham and that Brookfield would have to be canceled if it finally took control of the Catalan company, with associated costs.

As if this were not enough, the Canadian fund is also having great difficulty finding other investors willing to accompany it on this adventure and thereby reduce its cost, despite having tied up with several sovereign wealth funds (such as Qatarwho declined the invitation), pensions or infrastructure.