Stada's suitors, shot down by investors, rally with improved takeover bid

Stada
Stada said it supports the new buyout offer from co-buyers Bain and Cinven.

Two weeks after their bid failed to garner key support from shareholders, Stada’s wannabe buyers are back.

London-based private equity firm Cinven and Boston investment firm Bain Capital have returned with plans to resubmit their takeover offer for the German drugmaker, but this time, they’re sweetening the deal. The partners are offering €66.25 per Stada share, an improvement of about €16 million on their shot-down €5.32 billion buyout bid.

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While it’s normally not that easy for suitors to come back with a new offer, Germany's takeover authorities have excused Bain and Cinven from the customary 1-year exclusion period with Stada’s consent. The German drugmaker said it supports the new bid, with newly minted interim CEO Engelbert Coster Tjeenk Willink telling shareholders in a statement that “enabling Bain Capital and Cinven to submit an improved offer is in the best interest of the company and our shareholders.”

“The improvements in the form of financial consideration and the commitments to our employees, our locations and our corporate strategy are showing us that Bain Capital and Cinven are highly interested in developing Stada together with us,” he added.

This time around, it’ll also be easier to usher the bid past investors, just 63% of whom will need to OK the transaction for it to move forward. The last bid came along with a minimum acceptance threshold of 67.5%, and just 65.52% came out in favor of the deal.

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While Stada initially touted the turnout as proof that investors liked its current tack, the company’s board quickly replaced its CEO Matthias Wiedenfels and CFO Helmut Kraft with Willink and Bernhard Düttmann, respectively. And Reuters’ sources posited that the lack of deal enthusiasm was more a product of inaction on the part of retail investors than anything else.

Either way, the transaction should now have an easier time passing the bar, meaning a months-long deal saga could finally have its end in sight. Bain and Cinven notched their original offer back in April, following a $3.7 billion bid from Boston-based private equity firm Advent International and rumors that companies ranging from Mylan to China’s Fosun Pharmaceutical could be weighing their own offers.