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Grifols debt rallies on private ownership transfusion, but market remains sceptical
Will Macadam
+Hazik Siddiqui
+ 2 more
•4 min read
Brookfield and the Grifols family’s potential take-private of Grifols has caused the group’s debt stack to rally towards their prices for either a change of control put offer, or redemption.
All of the bonds define a change of control as occurring if the Grifols family acquires an equity stake greater than 50% in the blood plasma-related products producer, or if anyone else acquires a stake greater than 35%.
Grifols confirmed the tentative joint partnership between Brookfield and the Grifols family in a company announcement on 8 July. The prospective buyers requested access to company information to conduct their due diligence for the take-private.
Most of Grifols outstanding bonds have the market standard change of control put offer at 101. However, the group’s longest-dated bonds — €1.3bn of privately placed notes due 2030 paying 7.5% — are bound by unusual change of control language and this has driven the bonds up to 107.13 (versus 104.64 at the end of day 20 August).
These notes were issued in April (€1bn), with a subsequent tap issuance (€300m) in June, stipulating that if a change of control were to occur before 1 May 2026 then the notes are to be redeemed at (i) 104% plus (ii) all interest payments due through 1 May 2026 (subject to a discount rate), which we calculate as 110.4 (assuming a 1 January 2025 redemption date).
This is a particularly high threshold and suggests noteholders had factored in that a sale was likely within a two-year horizon. The notes were issued at 98.5.
