With Spanish plasma specialist Grifols turning down a potential multi-billion-dollar takeover bid, it’s likely back to the drawing board for Canadian private equity outfit Brookfield.
Grifols’ board of directors on Tuesday rebuffed Brookfield’s potential buyout offer, recommending management reject the non-binding bid that it argues “significantly undervalues the company’s fundamental prospects and its long-term potential.”
Brookfield, which telegraphed interest in the acquisition earlier this week, suggested it would pay 10.50 euros per A share and 7.62 euros per B share in the company, valuing Grifols at 6.45 billion euros (about $6.8 billion) overall, according to a securities filing (PDF).
As it stands, Brookfield is now “more likely” to walk away from the deal rather than try to rework it, analysts at ODDO BHF wrote in a note to clients Tuesday. So far, the private equity firm has requested information from Grifols' transaction committee without making a formal pitch.
The developments come after Brookfield confirmed over the summer that it had held exploratory talks to potentially take Grifols private. In September, Bloomberg reported that Brookfield would request more time to conduct due diligence on the company, citing a person close to the matter.
Grifols’ market value has deteriorated more than 20% from January—the same month New York hedge fund Gotham City Research issued a report accusing Grifols of wrongful accounting practices.
Grifols was quick to strike back against the claims, filing a lawsuit against Gotham that same month that accused the hedge fund of “knowingly making false and misleading statements” based on “false information” and “speculation.”
Regardless of the accuracy of the claims in Gotham’s report and Grifols’ lawsuit, ODDO BHF analysts noted at the time that the damage from the situation would “take some time to repair.”
Things haven’t all been bad for Grifols in 2024, with the company in June scoring an FDA green light for its primary immunodeficiency immunoglobulin drug Yimmugo. Grifols and its subsidiary Biotest, which developed Yimmugo, have predicted the drug could bring in roughly $1 billion in U.S. sales over the next seven years.
The companies plan to launch the drug in the U.S. in the first quarter of 2025 under a distribution partnership with Kedrion.
Meanwhile, Grifols recently reported (PDF) that it grew third-quarter revenues more than 12% to 1.79 billion euros (about $1.9 billion), driven primarily by biopharma sales, which increased 12% to 1.53 billion euros ($1.6 billion) over the three-month earnings period.
The company credited that sales momentum to strong uptake of proteins like immunoglobulins and albumin in the U.S. and other international markets.
While Grifols’ bread-and-butter business is plasma-derived medicines for chronic and rare diseases, the company also offers diagnostics and provides biological materials for research, clinical trials, manufacturing and more.