What price can Brookfield convince shareholders to pay?

Brookfield will have to use its checkbook if it wants to go ahead with its planned takeover bid for Grifols, after it submitted a first offer of €10.5 per Class A share and €7.62 for Class B shares that failed to convince either , nor anything else. investors, nor the company itself.

Rarely have analysts been as unanimous in their views as with the price offered by the blood product manufacturer, believing that it clearly “undervalues” the company, as experts interviewed by Finanzas.com explain.

Taking into account the two classes of shares that Grifols owns, Brookfield has about €6.5 billion on the table, but analysts are using a wide range of estimates, from €8.25 billion to €11.25 billion.

Brookfield Restrictions on Grifols

Before Gotham City Research’s bearish attack in early January, Grifols was trading at around €14, so many minorities will take losses below this level. If Brookfield had offered this price, the takeover bid would have been €9.625 million.

Now, given everything that has happened in this hellish year for Grifols, it is very difficult to achieve this price. It can go up to 12 euros, he explained to Finanzas.com. Gustavo Martinezmarket analyst and professor of finance at Universidad Francisco Marroquín.

The market analyst was slightly lower. Adrian Hostaletaccording to which Brookfield does not offer more than 11.5 euros for each Grifols title.

This range of 11.5-12 euros would mean an outlay for the Canadian fund of between 7,900 and 8,250 million euros, bearing in mind that it would have to offer the same amount for class A shares as for class B shares, as specified in the company’s charter. .

Any offer below this range will not make much difference compared to the 10.5 euros already rejected by Grifols, which will be doomed to failure.

Analyst consensus downplays Brookfield proposal

The previous price range is considered by experts to be the minimum zone to even think about evaluating a potential Canadian fund offer, but the truth is that Bloomberg analysts have come to the consensus that Grifols is worth much more.

Specifically, a target price of €16.37, calculated on average by the 20 experts who follow the blood products maker, would value Grifols at €11,254 million, almost double Brookfield’s first offer of €10.5.

For Banco Sabadell analysts, the fact that Brookfield is looking to increase its offer slightly is news of “little significance” until the offer becomes known, “if there is one at all.”

“We continue to believe Brookfield’s price offer undervalues ​​the company as it is 36 percent below our target price,” the experts added.

Harsh accusations from Mason Capital

The fact that Brookfield wants to buy Grifols at bargain prices is nothing new, but the fact that minorities are going to agree to it is another matter. “The hardest thing is convincing minorities,” Hostalet said.

An example of an insurgent minority is Mason Capital, which owns about 2.1 percent of Grifols.

The American Foundation sharply criticized Grifols’ strategic decisions, conflicts of interest and lack of transparency on the board of directors.

Additionally, following the recent fall in shares following the revelation that Brookfield was considering a price of €10.5, Mason Capital regretted that the purpose of the press leak was to “advance the interests of Brookfield, the family and Thomas.” Daga lowered the price to deprive the majority shareholders of the benefits.”

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