The big Spanish banks are not only reluctant to finance the public purchase offer announced by the fund Brookfield about Grifolsas announced by OKDIARIO, but the entities that do so are only willing to provide the 50% of the value shares of the company it is acquiring as part of the operation, according to industry sources.
This media reported on Friday that CaixaBank And Bank Sabadell They do not want to participate in the financing of the takeover bid and that Bank of Santander It will do so with the lowest possible amount and attempt to distribute the credit among other entities.
But in addition, the banks which will finally enter will impose a strong discount (haircut) who are negotiating with Brookfield. Initially, the bank placed it at 50% of the value of Grifols and, although it could give a little, it is not willing to go beyond 40% (i.e. she would not lend him more than 60% of the value of Grifols). actions).
This means that Brookfield would have to provide additional collateral – from other portfolio companies or assets – to increase this financing percentage. Or it would be necessary to look for other means of obtaining the necessary money, for example by resorting to large investment banks Americans or hedge funds.
According to the sources, the bank “does not have confidence in the situation of Grifols and considers that it is very risky to finance the public purchase offer with the unique guarantee of your actionswhich could suffer new collapses in the future” like that suffered after the various reports of Gotham City.
After the increase on Friday in reaction to its quarterly results (+4.36% to 11.13 euros), Grifols is worth 7.560 million euros on the stock market. From this figure, we would have to subtract the approximately 30% owned by the founding family, which would leave it at around 5.3 billion, but it is assumed that Brookfield would have to pay a sum prime on this price to ensure the success of the public exclusion offer.
In addition, the operation requires a refinancing from the fort debt of the company, which Brookfield must also obtain from the bank. In total, it is estimated that the total credit required for the two operations would be around 9.5 billion.
No more obstacles
Financing is yet another obstacle – and one of the most important – among the multiple setbacks facing the OPA. On the one hand, the due diligence (in-depth examination of the accounts) that Brookfield began in July and during which it noticed “strange things” in the accounting of its subsidiary in China.
Additionally, last week he asked the company for information about the relationship between Grifols and Scrantonprecisely at the center of criticism of Gotham and which Brookfield will have to undo if it finally takes control of the Catalan company, with the corresponding cost.
Furthermore, the Canadian fund is also having great difficulty finding other investors ready to support it in the adventure, as OKDIARIO also announced, although it has contacted several sovereign funds (such as Qatarwho rejected the invitation), pensions or infrastructure.
Faced with these difficulties, Brookfield is trying another solution to reduce the cost of the operation: paying less for the shares of type B (who have no political rights and receive more dividends) than by those of class A (normal actions).
Brookfield may condition the offer on shareholder approval of an amendment to the social statuses what is necessary to be able to apply this reduction. This would amount to placing shareholders in the dilemma between accepting the discount or finding themselves without a public takeover offer and, therefore, without the possibility of selling their shares, which have suffered a very severe punishment on the stock market this year, as we know. .
But it is also not easy to achieve this step, according to sources: “They could increase it, but they have to be fair to the shareholders; Otherwise, the operation will fail and there will be repercussions. At most they can offer a discount fairLet’s say 5% compared to A stocks. If they go up 15% or 20%, there’s nothing to talk about.
