Grifols Holders Call on Family, Brookfield to Offer ‘Fair Price’

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(Bloomberg) -- Some large Grifols SA shareholders are increasing pressure on the Spanish blood plasma firm to seek a substantial premium in talks with suitor Brookfield Asset Management.

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Spanish law firm Araoz & Rueda, known for advising large investors in the country, has been retained by several significant shareholders to help avert what they worry could be a lowball offer, according to founding partner Alejandro Fernández de Araoz. Toronto-based Brookfield and the Grifols family in July made an approach to buy the company and take it private.

Grifols’ board last week postponed the company’s capital markets day as the potential acquirers carry out due diligence.

Fernández de Araoz said by phone that they expect the family to act properly and “have been disappointed to see the CMD canceled,” adding that the Grifols clan needs to apply a “fair price.”

“I can’t say what a good price is, but if you think about fair value, you may look at the pre-short attack share price of above €15 or the average analyst target price,” he said.

Grifols’ voting shares — or class A stock — closed Tuesday at about €9.23, giving the company a market capitalization of €5.9 billion ($6.5 billion). Any proposal from Brookfield could give the company an equity value of roughly €8 billion, Bloomberg News has reported.

Fernández de Araoz said the investors aren’t acting in concert and still retain the freedom to act independently. Still, they could pose a counterweight to the Grifols family, which owns roughly 31% of their namesake company’s A shares.

Under Spanish law, investors representing more than 3% of the capital in a public company can call for extraordinary shareholder meetings, seek board representation and have extensive information rights. Spain’s Expansion newspaper reported the investors’ plans earlier.

The takeover approach came as the manufacturer of drugs made from human blood plasma tries to recover from an attack in January from short-seller Gotham City Research.

Gotham targeted Grifols by releasing a report in which it criticized the company’s corporate governance, accounting practices and certain transactions with third-parties linked to the Grifols family. In the aftermath of the attack, family members stepped down from all executive positions at Grifols but continue to sit on the board.