Brookfield seeks US$10.6 billion to back Grifols takeover

financialpost.com:

Brookfield Asset Management Inc. is asking banks to line up about €9.5 billion (US$10.6 billion) of debt for its potential take-private deal for Spanish pharmaceutical producer Grifols SA, according to people with knowledge of the matter.

The Toronto-based investor has asked banks to put up the funds to refinance Grifols’ existing debt, which includes loans and high-yield bonds, according to the people, who asked not to be named because the talks are private. Participating banks would commit to offer the financing before selling it on to investors.

The funds could be needed as the take-private purchase would trigger a clause that allows bondholders to demand the company pay them back at above par — well above where some of its bonds are currently trading.

Grifols’ 2028 bonds headed for a record gain after the Bloomberg report was published, jumping more than 6 cents U.S. to near 94 cents U.S. on the euro, while the company’s shares climbed as much as 6.4 per cent in Madrid.

The debt-raising plans follow the firm saying last month that Brookfield and the Grifols family had agreed to consider a bid. Including debt, the deal would likely rank as the biggest takeover of a publicly-traded European company since at least 2022, according to data compiled by Bloomberg.

Grifols, a maker of medicines produced with blood-plasma, has been struggling to recover from an attack by short-seller Gotham City Research in January. That sent Grifols’ shares and bonds into a tailspin, and the volatility was compounded over subsequent months by a trickle of bad news, including concerns over cash flow and accounting adjustments on investments in China. The company sought to calm investors by naming new management and removing the family from