European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>Since mid-March, amid sessions of significant volatility, share-price spreads have generally tightened across the European liquid universe of ordinary and preferred shares, with 10 tightening and 9 widening.</li>
<li>The discount of Grifols B has widened although Brookfield is again knocking at the door; Handelsbanken B shares trade at 48% premium to A shares. </li>
<li>Recommended trades long preferred/short ords: Atlas Copco, Grifols. Recommended trades long ordinary / short preferred shares: Henkel, SSAB Svenska Stal.</li>
</ul>


Since mid-March, amid sessions of significant volatility, share-price spreads have generally tightened across the European liquid universe of ordinary and preferred shares, with 10 tightening and 9 widening.
The discount of Grifols B has widened although Brookfield is again knocking at the door; Handelsbanken B shares trade at 48% premium to A shares. 
Recommended trades long preferred/short ords: Atlas Copco, Grifols. Recommended trades long ordinary / short preferred shares: Henkel, SSAB Svenska Stal.


Liquid Universe of European Ordinary and Preferred Shares: April '25 Report

<ul>
<li>Brookfield has renewed takeover interest in Grifols after a failed bid, signaling confidence in the company’s turnaround and prompting investor speculation about a significantly improved future offer.</li>
<li>Grifols’ financial position has strengthened with a 4.6x Net Debt/EBITDA, €504 million in free cash flow, and strategic refinancing, reducing the likelihood of a capital increase and supporting shareholder value.</li>
<li>Grifols B shares trade at a 21.6% discount to A shares, offering an attractive convergence opportunity, as bylaws mandate equal treatment in the event of a public acquisition offer.</li>
</ul>


Brookfield has renewed takeover interest in Grifols after a failed bid, signaling confidence in the company’s turnaround and prompting investor speculation about a significantly improved future offer.
Grifols’ financial position has strengthened with a 4.6x Net Debt/EBITDA, €504 million in free cash flow, and strategic refinancing, reducing the likelihood of a capital increase and supporting shareholder value.
Grifols B shares trade at a 21.6% discount to A shares, offering an attractive convergence opportunity, as bylaws mandate equal treatment in the event of a public acquisition offer.


Blood, Sweat, and Bids: Grifols Draws Renewed Interest from Brookfield

<ul>
<li>Debt Refinancing Achieved: Grifols issued €1.3 billion in bonds and extended its revolving credit facility, significantly improving liquidity to €1.7 billion proforma for Q3 2024 while addressing 2025 maturities.</li>
<li>Activist Shareholder Pressure: Hedge funds, including Flat Footed, continue to push for governance reforms, citing conflicts of interest and value destruction involving the Grifols family and board member Tomás Dagá.</li>
<li>Valuation Opportunity: Grifols trades at a high discount to peers, with upside potential based on its strong market position in plasma therapies, EBITDA recovery, and margin expansion post-COVID.</li>
</ul>


Debt Refinancing Achieved: Grifols issued €1.3 billion in bonds and extended its revolving credit facility, significantly improving liquidity to €1.7 billion proforma for Q3 2024 while addressing 2025 maturities.
Activist Shareholder Pressure: Hedge funds, including Flat Footed, continue to push for governance reforms, citing conflicts of interest and value destruction involving the Grifols family and board member Tomás Dagá.
Valuation Opportunity: Grifols trades at a high discount to peers, with upside potential based on its strong market position in plasma therapies, EBITDA recovery, and margin expansion post-COVID.


<ul>
<li>On November 27, Brookfield withdrew its €6.45 billion takeover bid for Grifols, citing valuation disagreements, shareholder resistance, and financing challenges after months of negotiation.</li>
<li>Grifols’ shareholders sought valuations near €14 per share, far above Brookfield’s offer, other challenges included regulatory hurdles requiring 75% approval and financing constraints due to rising interest rates.</li>
<li>The failed bid underscores Grifols’ focus on recovery, leveraging its plasma-derived therapies market position while addressing high leverage, cash flow concerns, and governance to restore investor confidence.</li>
</ul>


On November 27, Brookfield withdrew its €6.45 billion takeover bid for Grifols, citing valuation disagreements, shareholder resistance, and financing challenges after months of negotiation.
Grifols’ shareholders sought valuations near €14 per share, far above Brookfield’s offer, other challenges included regulatory hurdles requiring 75% approval and financing constraints due to rising interest rates.
The failed bid underscores Grifols’ focus on recovery, leveraging its plasma-derived therapies market position while addressing high leverage, cash flow concerns, and governance to restore investor confidence.


<ul>
<li>Rejected Offer: Grifols' independent committee rejected Brookfield's proposed valuation of €10.50 per Class A share €7.62 per Class B share, citing significant undervaluation of the company's long-term prospects.</li>
<li>Stakeholder Dynamics: Brookfield seeks a statutory amendment to differentiate Class A and B share prices, while opposition from Brandes (13.5% of Class B shares) and Mason complicates negotiations.</li>
<li>Financial Recovery: Grifols achieved 12% revenue growth in Q3 2024, reduced net debt to €8.1 billion, and targets a 4.5x leverage ratio by year-end, supporting improved financial stability.</li>
</ul>


Rejected Offer: Grifols' independent committee rejected Brookfield's proposed valuation of €10.50 per Class A share €7.62 per Class B share, citing significant undervaluation of the company's long-term prospects.
Stakeholder Dynamics: Brookfield seeks a statutory amendment to differentiate Class A and B share prices, while opposition from Brandes (13.5% of Class B shares) and Mason complicates negotiations.
Financial Recovery: Grifols achieved 12% revenue growth in Q3 2024, reduced net debt to €8.1 billion, and targets a 4.5x leverage ratio by year-end, supporting improved financial stability.


Lowball Non-Binding Indication from Brookfield

Spain

Grifols S.A. develops, manufactures, and markets plasma derivatives, IV Therapy, enteral nutrition, diagnostic systems, and medical materials.

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Grifols (GRF SQ)

Liquid Universe of European Ordinary and Preferred Shares: April '25 Report

Since mid-March, with sessions of massive volatility, share-price spreads have generally tightened across European liquid universe of ordinary and...

Jesus Rodriguez Aguilar

Blood, Sweat, and Bids: Grifols Draws Renewed Interest from Brookfield

Brookfield's renewed interest in Grifols signals confidence in its turnaround, with strengthened financials and potential for improved future...

Jesus Rodriguez Aguilar

Grifols: Activism and Debt Refinancing

Grifols strengthens liquidity through debt refinancing, faces activist shareholder pressure for governance reforms, and presents a valuation...

Jesus Rodriguez Aguilar

Brookfield's Bid for Grifols Collapses

Brookfield withdraws €6.45 billion takeover bid for Grifols due to valuation disagreements, shareholder resistance, and financing challenges.

Jesus Rodriguez Aguilar

Lowball Non-Binding Indication from Brookfield

Rejected Offer: Grifols' independent committee rejected Brookfield's proposed valuation of €10.50 per Class A share, citing significant...

Jesus Rodriguez Aguilar

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Liquid Universe of European Ordinary and Preferred Shares: April '25 Report

Since mid-March, with sessions of massive volatility, share-price spreads have generally tightened across European liquid universe of ordinary and...

Jesus Rodriguez Aguilar

Blood, Sweat, and Bids: Grifols Draws Renewed Interest from Brookfield

​Brookfield's renewed interest in Grifols signals confidence in its turnaround, with strengthened financials and potential for improved future...

Jesus Rodriguez Aguilar

Grifols: Activism and Debt Refinancing

​Grifols strengthens liquidity through debt refinancing, faces activist shareholder pressure for governance reforms, and presents a valuation...

Jesus Rodriguez Aguilar

Brookfield's Bid for Grifols Collapses

​Brookfield withdraws €6.45 billion takeover bid for Grifols due to valuation disagreements, shareholder resistance, and financing challenges.

Jesus Rodriguez Aguilar

Lowball Non-Binding Indication from Brookfield

Rejected Offer: Grifols' independent committee rejected Brookfield's proposed valuation of €10.50 per Class A share, citing significant...

Jesus Rodriguez Aguilar

Brookfield's renewed interest in Grifols signals confidence in its turnaround, with strengthened financials and potential for improved future...

Grifols strengthens liquidity through debt refinancing, faces activist shareholder pressure for governance reforms, and presents a valuation...

Brookfield withdraws €6.45 billion takeover bid for Grifols due to valuation disagreements, shareholder resistance, and financing challenges.