Grifols linked to €7bn takeover offer from Brookfield

Private equity company Brookfield has reportedly moved closer to taking control of Grifols, after months of disruption at the Spanish pharma company.

A report in Spanish newspaper El Confidencial suggests that Brookfield is preparing to make a bid to take a 65% controlling stake in the drugmaker for €10.50 per share, worth around €7 billion ($7.4 billion).

That is below Grifols' current share price of around €11, and well shy of its near-€15 share price at the start of the year, ahead of a campaign by hedge fund Gotham City Research, which claimed that the company had fraudulently manipulated its financial reporting and wiped around a third off its stock value.

Brookfield confirmed in September that it was considering a joint takeover plan with the Grifols family, which owns around 30% of the company, and that it could result in it being de-listed from the Spanish stock exchanges and the Nasdaq in the US.

The new report suggests that Brookfield has undertaken months of due diligence into Grifol's finances, but neither company has been prepared to comment on the speculation.

Earlier this month, Grifols reported a 12% increase in revenue to €1.79 billion in the 2024 third quarter, led by its biopharma division, with operating profit up almost 27% to €462 million.

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.

Canada-based Brookfield has reportedly partnered with Deutsche Bank and Banco Santander on refinancing Grifols' current debt of around €11 billion, which has been viewed as a preamble to the takeover bid, according to sources cited by El Confidencial.

Grifols is anticipating a period of strong growth on the back of its recently FDA-approved intravenous immunoglobulin product Yimmugo, which it expects to become a $1 billion product within the next seven years, as well as a new bi-weekly dosing approval for Xembify and pipeline products fibrinogen and trimodulin.

The drugmaker has been involved in a series of acquisitions in recent years to rebuild its business after it was hit hard by plasma shortages during the pandemic.