Peter Haynes, head of index and market structure research at TD Cowen, talks about Brookfield Asset Management moving its headquarters to New York.
(Bloomberg) — Brookfield Asset Management is awaiting information from Grifols SA about related-party transactions as it seeks to complete its due diligence on the company, a person familiar with the matter said.
That’s a key part of a number of pending issues that have slowed Brookfield’s process of assessing Grifols’ value ahead of a potential takeover bid, said the person, who asked not to be identified discussing private information. The New York-based asset manager is still pursuing a deal and is confident there is a way to finance a transaction, the person said.
Brookfield said in July it was interested in taking the Spanish drugmaker private along with its founding family, which owns more than a third of the company. It has already asked for more time for the due diligence investigation, Bloomberg News reported in September.
Grifols will announce its third quarter results on November 7. Representatives for Brookfield and Grifols declined to comment.
Transactions between Grifols and Scranton Enterprises BV, its second-largest shareholder, were at the heart of the accusations made against the Barcelona-based company by short-seller Gotham City Research in January. The charges centered on the sale of two companies to Scranton — a vehicle controlled by former executives, some Grifols family members and Tomas Daga, a longtime board member. Although Scranton owns the two companies, Grifols consolidated their profits into its own accounts and said it had control over them.
Grifols has denied wrongdoing and is suing Gotham in New York court.
In the wake of the short seller report, which wiped out more than $3 billion in Grifols’ market value, then-Chief Executive Officer and Chairman Thomas Glanzmann vowed to cancel all related-party deals.
The short-seller allegations tightened scrutiny of Grifols’ accounting, and the company said in July that it was reducing the value of its stake in Shanghai RAAS Blood Products Co. had overestimated, which confirmed an earlier Bloomberg News report. The company also said it had restated figures related to the joint venture with ImmunoTek, which resulted in a decline in net profit for 2022, 2023 and the first half of 2024.
Since January, Grifols has removed all family members from leadership positions and hired outsiders to serve as CEO and Chief Financial Officer. In September, the company also removed executive powers from Chairman Glanzmann in an effort to separate board functions from executive management.
Brookfield’s potential bid, after months of stock market turmoil, has prompted some shareholders to take steps to defend their interests in the event of a low bid. Three investors holding a total of 7.7% of Grifols’ capital have said they would apply for a seat on the board. In addition, other shareholders have hired law firm Araoz & Rueda to represent them during the takeover process.
Brookfield has approached several investment funds to join its bid to acquire the blood plasma company, including sovereign wealth funds ADQ and GIC Pte, Bloomberg News reported in August.
Mark Carney, chairman of Brookfield Asset Management, is also chairman of Bloomberg Inc.
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