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Berenberg Cuts Grifols’ Potential by 23%, but Continues to Bet on its Shares

Berenberg has slashed Grifols’ target price by 23% to 19.8 euros due to higher-than-expected net debt. Despite this, Berenberg remains optimistic about Grifols’ potential, estimating a 134% upside from the current price. Grifols recently announced a private placement of €1 billion in senior secured bonds, intending to use the funds to pay off unsecured bonds due in 2025.




Ups and downs for Grifols. The analysis firm Berenberg has cut the target price of the shares of the Spanish blood products company by 23%, from 25.8 euros to 19.8 euros.

Berenberg still remains optimistic regarding Grifols’ upward potential

The financial institution Berenberg was already optimistic in February after the publication of a report by the bearish fund Gotham City Research that accused Grifols of artificially reducing its leverage, but has changed its criteria after the Catalan company reported a higher than expected net debt .

All in all, Berenberg remains optimistic regarding Grifols’ upward potential, which he places at 134% compared to yesterday’s close. So far this year, the value of the blood products company’s shares has fallen 44%, weighed down by Gotham’s offensive and the persistence of other bearish funds that have bet against the company.

Last week, Grifols announced the signing of a private placement of €1 billion in 7.5% senior secured bonds, maturing in April 2030 , subject to the usual closing conditions for this type of transaction. According to company sources, the funds obtained from this transaction will be used to amortize unsecured bonds maturing in 2025.

Berenberg still remains optimistic regarding Grifols’ upward potential. Source

Grifols will provide real guarantees granted and the respective guarantors to the buyers of the senior bonds

The Catalan company detailed that the terms and guarantees of these bonds are “significantly consistent” with the existing documentation on Grifols’ secured debt, including the real guarantees granted and the respective guarantors. He also stated that this transaction represents an “important financial milestone,” underlining “the confidence of the financial markets in the solidity of Grifols’ business and operational resilience.”

The notes will not be registered under the United States Securities Act of 1933 and may not be offered or sold in the United States absent registration or an equivalent exemption from registration requirements.

Grifols has had Osborne Clarke and Proskauer Rose LLP as legal advisors for this operation, while Deutsche Bank has been the company’s placement agent.

Europacific Growth Fund Lends Over 100 Million Euros in Grifols Shares

Europacific Growth Fund, legal owner of Grifols shares, has lent more than 100 million euros in shares of the blood products firm, which amounts to a total amount of 13.1 million shares, according to the documentation contained in the National Securities Market Commission (Cnmv).

Specifically, Europacific Growth Fund, which has reduced its participation in Grifols’ capital from 3.4% to 3.2%, distributes its position in the Spanish firm between 0.14% of voting rights attributed to the shares and 3.07% through financial instruments, which were notified to the supervisor last Friday, March 15th.

The latest registered notification also shows that the percentage of voting rights attributed to the shares has decreased from 2.25% (9.6 million shares) to 0.14% (631,807 shares), reflecting that Europacific Growth Fund has disposed of a package of 8,972,419 Grifols shares, valued at more than 69 million euros based on current market prices.


(Featured image by 6689062 via Pixabay)

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Eva Wesley is an experienced journalist, market trader, and financial executive. Driven by excellence and a passion to connect with people, she takes pride in writing think pieces that help people decide what to do with their investments. A blockchain enthusiast, she also engages in cryptocurrency trading. Her latest travels have also opened her eyes to other exciting markets, such as aerospace, cannabis, healthcare, and telcos.