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Grifols says founding family, Brookfield looking to delist drugmaker
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Grifols says founding family, Brookfield looking to delist drugmaker
Jul 8, 2024 10:33 PM

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)

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