Grifols' Board Rejects Brookfield's Buyout Offer, Stock Down 8%

Core Viewpoint - Grifols' shares fell over 8% after the company's board rejected Brookfield Asset Management's acquisition offer of €6.45 billion (approximately $6.8 billion), citing that the valuation significantly undervalues the company's long-term potential [1] Group 1: Company Performance - Grifols' stock has declined 26.8% year-to-date, compared to a 6.9% decline in the industry [4] - The recent drop in share price was influenced by short-seller Gotham City Research's reports alleging that Grifols overstated earnings and understated debt, alongside negative news regarding cash flows and accounting adjustments related to investments in China [6] - In response to these concerns, Grifols appointed new management and removed family members from executive roles [7] Group 2: Acquisition Attempt - Brookfield is in discussions with banks to raise funds for the acquisition, which will also be used to refinance Grifols' existing debt, including loans and high-yield bonds [2] - A clause in Grifols' existing debt agreements allows bondholders to demand early repayment at a premium if the company is taken private, necessitating this refinancing [2] Group 3: Investor Sentiment - Investors reacted negatively to Brookfield's valuation, leading to concerns that the acquisition deal may not proceed due to the lower-than-expected offer [3]