Bankinter | Flat Footed, Mason Capital Management and Sachem Head funds jointly control 7.7% of Grifols (GRF) and have asked for a seat on the Grifols board. Their objective is to monitor the takeover bid process being analysed by Brookfield and to ensure that a high premium is paid.
Opinion of the Bankinter analysis team: Negative news and a new complication in the development of the possible takeover bid for Grifols. On 8 July, we learned that Brookfield was analysing this possibility. More than two months have passed since then and the news points to an increase in the price of the takeover bid for Brookfield, which is seeking financing:
(i) statutory requirement to match the bid price of the two classes of shares (the economic and political rights are different between the classes);
(ii) seeking financing from Middle Eastern sovereign wealth funds;
(iii) renunciation of majority shareholding by Brookfield;
(iv) demand by the funds to be represented on the board and to pay a high premium in the takeover bid.
The potential takeover bid becomes more complicated, the process is delayed and may not go ahead. We reiterate our Sell recommendation.
