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Brookfield in talks with banks for funding Grifols' takeover bid, sources say
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Brookfield in talks with banks for funding Grifols' takeover bid, sources say
Aug 21, 2024 11:07 PM

BARCELONA/LONDON (Reuters) - Canadian fund Brookfield is in talks with banks to raise funds for its possible takeover bid for beleaguered Spanish drugmaker Grifols, two people familiar with the matter said on Wednesday.

Those banks include Bank of America ( BAC ) and UBS, one of the people said.

Grifols said last month it would study a preliminary offer presented by Brookfield and the Grifols founding family, which holds a stake of around 30% in Grifols, for a possible joint takeover bid with the intent to de-list Grifols.

Bloomberg reported earlier on Wednesday that Brookfield has asked banks, without identifying them, to backstop up to $10.6 billion to refinance Grifols' existing debt for a potential take-private deal for the Spanish pharmaceutical firm, sending Grifols' shares up as much as 6%.

The operation with Brookfield is advancing, the first person said without elaborating.

Grifols, Brookfield, UBS and Bank of America ( BAC ) declined to comment.

Since early January, short-seller fund Gotham City Research has released several reports accusing Grifols of overstating earnings and understating debt.

The accusations, which Grifols denies, have erased 40% of the Barcelona-based company's market value.

Following the reports, Grifols, which makes medicine using blood plasma, announced management changes and revised its reported leverage higher after Spain's market supervisor required that it change its calculations.

Grifols' net financial debt reached 9.4 billion euros ($10.46 billion) in the second quarter of this year, around 1.5 billion euros lower than in the prior quarter. The company has focused on cutting debt since its business was severely hit at the start of the COVID-19 pandemic due to a shortage of plasma.

($1 = 0.8989 euros)

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