(Bloomberg) -- Grifols SA’s board postponed its capital markets day as Brookfield Asset Management carries out due diligence on a potential takeover offer.
The event had been scheduled for Oct. 10, but will now be moved back as the Spanish pharma company’s founding family and Brookfield go ahead with talks on a potential bid, according to a letter Grifols sent to investors that was seen by Bloomberg.
Brookfield is currently conducting due diligence and “no offer, agreement, or decision regarding the potential transaction” has been made, the letter said.
The Toronto-based asset manager and the family in July made an approach to buy the firm and take it private. Brookfield is now asking banks to line up about €9.5 billion ($10.5 billion) of debt for the potential deal, Bloomberg reported in August. It’s also in talks with several investment funds to join the bid.
The joint bid is the latest twist in a crisis that engulfed Grifols earlier this year, when a short-seller report accusing the firm of manipulating its figures sent the shares into a tailspin. They’ve lost almost a third of their value since the report.
Though Spain’s market regulator found “no significant errors” in Grifols’ reporting, investors have zeroed in on the company’s indebtedness and its ability to generate cash, which has been further exacerbated by perceptions of poor communication and by accounting adjustments in China.
In the aftermath of the short-seller accusations, Grifols removed all family members from executive positions, hired an outsider as chief executive officer and named a new chief financial officer.
The company completed the sale of a stake in China’s Shanghai RAAS in June, pocketing 12.5 billion yuan ($1.72 billion) to help pay down debt. The raising of €1 billion through a private placement in April will also enable the company to address another bond due in 2025 and extend its maturity.
Vehicles controlled by the Grifols family and former executives own more than 30% of the company.
Mark Carney, chair of Brookfield Asset Management, is also chair of Bloomberg Inc.
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