(Sept 30): Brookfield Asset Management will request more time to conduct due diligence on Grifols SA, as it seeks to take the Spanish drug maker private, according to a person familiar with the matter.

The Toronto-based asset manager could send a letter to the Grifols board as early as Monday to ask for an extension to complete its review of the business, the person said, asking not to be named discussing private information. 

Brookfield said in July that it was interested in taking the Spanish company private along with its founding family, which owns more than a third of the company.

Spokespeople for Brookfield and Grifols declined to comment.

Grifols’ market value has plummeted to €6.4 billion (RM29.55 billion) since short seller Gotham City Research accused the firm of manipulating its accounts. Grifols has denied any wrongdoing and is suing Gotham in a New York court.

Investors have been eying the firm’s leverage levels since the pandemic, when plasma collection slumped and debt ballooned. 

Grifols has responded by cutting costs and selling off most of its stake in Chinese rival Shanghai RAAS Blood Products Co, pocketing US$1.7 billion (RM7.04 billion) in proceeds. That sale, combined with private credit placements, allowed Grifols to clear debt maturities for 2025.

The short seller report has also increased market scrutiny on Grifols’ accounting, and the company said in August that it had overstated the value of its stake in Shanghai RAAS, reporting an accounting adjustment of €457 million.

Since the Gotham attack, Grifols has removed all family members from executive positions and named outsiders as its new chief executive officer and chief financial officer. Earlier this month, the firm also removed chairman Thomas Glanzmann’s executive powers in a move to separate board functions from daily management.

The approach from Brookfield has led a number of shareholders to take steps to defend their interests in the event of a low offer. 

Three investors holding a total of 7.7% of the group’s capital have pooled shares in order to demand a seat on the board. Another group of shareholders has hired law firm Araoz & Rueda to represent them during the takeover process.

Brookfield held talks with sovereign wealth funds including Abu Dhabi’s ADQ and Singapore’s GIC Pte to join the takeover of Grifols, Bloomberg reported in August. A possible proposal could give the company an equity value of around €8 billion, Bloomberg reported at the time.

Mark Carney, chair of Brookfield Asset Management, is also chair of Bloomberg Inc.

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