LONDON/MADRID/BARCELONA, July 8 (Reuters) - The Grifols
family and Canadian fund Brookfield have agreed to
evaluate a possible joint takeover bid for beleaguered Spanish
drugmaker Grifols with the intent to delist it, the
companies said in regulatory filings on Monday.
Grifols said its board held an extraordinary meeting over
the weekend to study a preliminary offer presented by Brookfield
and the Grifols founding family, which holds a stake of around
30%, according to the latest data by Spanish securities
regulator CNMV.
Brookfield and the family have asked the board for access to
certain company information for due diligence before potentially
buying all of Grifols' shares, Brookfield and Grifols said in
the filings.
Brookfield is considering investing more than 5 billion
euros ($5.41 billion) in Grifols, with part of that amount to
refinance and restructure the company's debt, according to a
source close to the conversations.
The Canadian-based fund will carry out the deal alongside
other investors in its funds, the source said.
The Grifols family is not planning to sell its stake, the
source said.
Grifols' net financial debt reached 10.9 billion euros in
the first quarter of this year, around 400 million euros higher
than in the prior quarter.
Grifols and Brookfield declined to comment.
The conversation between the Grifols family and Brookfield
started more than a year ago, the source said, before
short-seller fund Gotham City Research released several reports
that have erased a third of Grifols' value.
Grifols' shares closed 9.7% higher on Spain's blue-chip
index Ibex 35 on Monday.
The deal could be worth around 5.5 billion euros ($5.96
billion), according to Cinco Dias newspaper which first reported
on the deal.
Grifols' market capitalization reached 6.2 billion euros on
Monday.
Brookfield said the talks over the joint offer could end
with Grifols delisted from the Spanish stock exchange and the
Nasdaq.
"There is no agreement or decision regarding a potential
transaction or the related terms and conditions," Brookfield
said, adding there was no guarantee there would be a final
offer.
Grifols also said it did not know if a transaction will take
place or the terms under which it could be carried out.
Its main shareholders - in addition to the descendants of
the three brothers who took the company from a small
family-owned lab in Barcelona to a global player in the plasma
derivatives business - include the funds Capital Research and
Management Company, BlackRock, Europacific Growth Fund and Rokos
Global Macro Master Fund, according to Spain's stock market
regulator.
Since early January, short-seller fund Gotham City Research has
released several reports accusing Grifols of overstating
earnings and understating debt.
Following the reports, Grifols announced governance changes
and revised its reported leverage higher after market supervisor
CNMV required that it change its calculations.
Last week, Grifols appointed Rahul Srinivasan as chief financial
officer in a management reshuffle and Scranton Enterprises, an
investment vehicle partly tied to the Grifols family, reached an
agreement with a private investor to refinance 377 million euros
of debt in one of its units.
($1 = 0.9229 euro)