Concerns Raised Over Grifols' Delisting Proposal for Biotest
Concerns Raised Over Grifols' Delisting Proposal for Biotest
Westbourne River Partners has expressed significant concerns regarding the delisting proposal by Grifols S.A. directed towards Biotest AG shareholders. They believe this move may negatively impact minority investors.
Letter Overview
The letter addressed to Biotest AG highlights the apprehensions of Westbourne River Partners, the largest minority shareholder in the company. They urge the boards of Biotest to reconsider the delisting pressure and the pricing offered by Grifols, which they feel is unjustly low.
Key Issues Identified
One critical aspect of the letter is the perceived lack of transparency that will arise from the delisting. The company fears that reduced disclosure obligations will impair minority shareholders' ability to assess Biotest’s performance going forward.
Grifols’ Integration Plans
Grifols previously signaled its intent to fully integrate Biotest into its operations. However, the method they have chosen raises alarms among minority shareholders, as it might weaken their influence and visibility into the company’s strategic direction.
Financial Performance Concerns
The letter points out notable discrepancies between Biotest's earlier cash flow guidance and its actual results. In November 2024, management suggested a significant cash burn, only to later report a positive cash inflow, implying a 100 million euro surplus against prior expectations.
Management Board's Approach
Westbourne River Partners expressed their discontent with the management board's agreement to support the delisting despite the evident disparity in company performance. They believe this raises questions about the board's commitment to all shareholders.
Implications of Delisting
Should the delisting go ahead, Westbourne River Partners fears it would stifle market comparisons and accountability. Minority shareholders would struggle to contest any unfavorable business practices or projections led by the management.
Action Requested
Following this, Westbourne River Partners calls on the boards to reconsider their support for the delisting. They insist that the offer price not only reflects fair market value but also comes with explicit assurance regarding future business prospects and transparency.
Valuation Concerns
Westbourne argues that the pricing Grifols is using for the delisting is significantly lower than the fair value. When Grifols last sought to acquire Biotest, they proposed a much higher price per share, raising questions about the fairness of the current offer.
Expectations for Future Communication
In light of these issues, Westbourne urges Biotest's board to enhance communication with all shareholders about the company’s vision moving forward, especially regarding new product rollouts like Fibrinogen and Trimodulin.
Conclusion
In conclusion, Westbourne River Partners is advocating for the interests of minority shareholders and demanding that Biotest’s management provide better clarity and accountability as they navigate the delisting offer from Grifols.
Frequently Asked Questions
What is the main concern of Westbourne River Partners regarding Biotest?
Westbourne River Partners is primarily concerned that the delisting by Grifols will harm minority shareholders and reduce transparency.
How does Grifols plan to integrate Biotest?
Grifols intends to integrate Biotest through structural measures under German law, but it currently pursues delisting as a means to do so.
What financial inconsistency is highlighted in the letter?
The letter highlights the difference between Biotest's projected cash burn and the actual cash inflow realized, showing a significant positive variance.
What action does Westbourne River Partners want Biotest’s board to take?
They want the board to withdraw support for the delisting or adjust the offer price to reflect fair market value.
What products are Biotest working on that may influence shareholder value?
Biotest is advancing with its Fibrinogen product and the phase-III trial of Trimodulin, both expected to create substantial market opportunities.
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