Could Spain’s Grifols be heading for de-listing?

The family that owns Spanish drugmaker Grifols and private equity firm Brookfield are considering whether to take the company private in a deal that could be worth around €5.5 billion (almost $6 billion), according to media reports.

The company – which has been fighting off an attack from hedge fund Gotham City Research in the last few months that claimed that it had fraudulently manipulated its financial reporting – held an extraordinary board meeting over the weekend to look into a takeover offer from Brookfield and the Grifols family, which owns around 30% of the company.

Spanish newspaper Cinco Dias broke the news yesterday, which was confirmed in a financial filing this morning, suggesting that an agreement could be completed within the next few weeks, subject to a full audit of Grifols’ finances. Brookfield has said there is no guarantee that an agreement would be reached.

If the deal goes through, Grifols shares would no longer appear on either Spanish stock exchanges or the Nasdaq in the US. Trading in the company’s shares was suspended ahead of the formal announcement, but had risen by around 17% at the time of writing.

The stock has seen some volatility since Gotham City made its allegations of fraud in a series of reports, which prompted Grifols to file a lawsuit against the short seller and co-founders Daniel Yu and Cyrus de Weck in the US in January.

The hedge fund claimed that Grifols had carried out “materially deceptive” accounting practices by not disclosing its debt, an allegation that has seen several billion euros wiped off the company’s valuation.

The company, first formed in 1909 and headquartered in Barcelona, is a manufacturer of plasma-based pharmaceuticals and other products like blood transfusion diagnostics, which is tax-domiciled in Ireland and has a significant presence in the US.

The takeover deliberations come shortly after Grifols completed the sale of its 20% stake in Chinese blood products unit Shanghai RAAS to Haier, a deal first announced in 2020, raising cash of around €1.6 billion.

At the same time, Grifols has formed a strategic alliance with Haier in the market for plasma products, particularly albumin, and diagnostics. It has been involved in a series of acquisitions in recent years to rebuild its business after being hit hard by plasma shortages during the pandemic.

Meanwhile, Grifols is also expecting great things for its recently FDA-approved intravenous immunoglobulin product Yimmugo, which it expects to become a $1 billion product within the next seven years, and pipeline products fibrinogen and trimodulin.