European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

Grifols S.A. develops, manufactures, and markets plasma derivatives, IV Therapy, enteral nutrition, diagnostic systems, and medical materials.

<ul>
<li>Rejected Offer: Grifols' independent committee rejected Brookfield's proposed valuation of €10.50 per Class A share €7.62 per Class B share, citing significant undervaluation of the company's long-term prospects.</li>
<li>Stakeholder Dynamics: Brookfield seeks a statutory amendment to differentiate Class A and B share prices, while opposition from Brandes (13.5% of Class B shares) and Mason complicates negotiations.</li>
<li>Financial Recovery: Grifols achieved 12% revenue growth in Q3 2024, reduced net debt to €8.1 billion, and targets a 4.5x leverage ratio by year-end, supporting improved financial stability.</li>
</ul>


Rejected Offer: Grifols' independent committee rejected Brookfield's proposed valuation of €10.50 per Class A share €7.62 per Class B share, citing significant undervaluation of the company's long-term prospects.
Stakeholder Dynamics: Brookfield seeks a statutory amendment to differentiate Class A and B share prices, while opposition from Brandes (13.5% of Class B shares) and Mason complicates negotiations.
Financial Recovery: Grifols achieved 12% revenue growth in Q3 2024, reduced net debt to €8.1 billion, and targets a 4.5x leverage ratio by year-end, supporting improved financial stability.


Lowball Non-Binding Indication from Brookfield

Nagarro SE provides information technology services. The Company offers enterprise and application lifecycle solutions, infrastructure management, digital commerce, IoT, product engineering, and consulting services. Nagarro serves customers worldwide.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/nagarro-se" target="_blank" data-smartkarma-citation="entities:44095:1" rel="noopener">Nagarro SE (NA9 GR)</a> is in discussions for a potential delisting and takeover, with private equity firm Warburg Pincus reportedly considering a buyout.</li>
<li>Strong Financial Growth: Q3 2024 revenue rose by 3.7% to €242.9M, with a 5.6% constant currency growth, adjusted EBITDA improving to €34.6M (14.3% of revenue).</li>
<li>Nagarro trades at a P/E ratio below peers, suggesting undervaluation despite financial resilience, strong liquid assets, and 14% stock price growth over the last eight trading days.</li>
</ul>



Nagarro SE (NA9 GR) is in discussions for a potential delisting and takeover, with private equity firm Warburg Pincus reportedly considering a buyout.
Strong Financial Growth: Q3 2024 revenue rose by 3.7% to €242.9M, with a 5.6% constant currency growth, adjusted EBITDA improving to €34.6M (14.3% of revenue).
Nagarro trades at a P/E ratio below peers, suggesting undervaluation despite financial resilience, strong liquid assets, and 14% stock price growth over the last eight trading days.


Nagarro SE: Potential Takeover Amidst Financial Growth

<ul>
<li>Since mid-October, share-price spreads have generally tightened across European liquid universe of ordinary and preferred shares (10 have tightened, 9 widened). Most spreads that were already tightening, kept doing so.</li>
<li>Most spreads that were already tightening, kept doing so. Recommended trades long preferred / short ordinary shares: Atlas Copco, Grifols SA, Media-for-Europe.</li>
<li>Recommended trades long ordinary / short preferred shares: Carlsberg, Henkel, SSAB Svenska Stal.</li>
</ul>


Since mid-October, share-price spreads have generally tightened across European liquid universe of ordinary and preferred shares (10 have tightened, 9 widened). Most spreads that were already tightening, kept doing so.
Most spreads that were already tightening, kept doing so. Recommended trades long preferred / short ordinary shares: Atlas Copco, Grifols SA, Media-for-Europe.
Recommended trades long ordinary / short preferred shares: Carlsberg, Henkel, SSAB Svenska Stal.


Liquid Universe of European Ordinary and Preferred Shares: November‘24 Report

Greenvolt-Energias Renovaveis / Event-Driven

Greenvolt - Energias Renovaveis, S.A. produces electricity from renewable energy sources of forest biomass. The Company provides operational renewable energy platform that develops and operates onshore wind and PV installations, as well as engages energy production from forest and urban wood residues. Greenvolt Energias Renovaveis serves customers worldwide.

<ul>
<li>Core shareholders holding 60.86% accepted KKR's €8.30/share offer, triggering a mandatory tender for minorities. Greenvolt's revised offer price (€8.3107/share) represented a 95.5% IPO premium, but faced critiques for modest value. </li>
<li>By October 25, KKR held 97.64% of Greenvolt’s share capital, surpassing the 90% threshold for a squeeze-out and delisting.</li>
<li>The delisting is expected by late 2024 or early 2025, following squeeze-out completion. Minority shareholders will be compelled to sell, receiving €8.3107/share. <strong>Gross spread is 0.8%. Long.</strong>
</li>
</ul>


Core shareholders holding 60.86% accepted KKR's €8.30/share offer, triggering a mandatory tender for minorities. Greenvolt's revised offer price (€8.3107/share) represented a 95.5% IPO premium, but faced critiques for modest value. 
By October 25, KKR held 97.64% of Greenvolt’s share capital, surpassing the 90% threshold for a squeeze-out and delisting.
The delisting is expected by late 2024 or early 2025, following squeeze-out completion. Minority shareholders will be compelled to sell, receiving €8.3107/share. Gross spread is 0.8%. Long.



<ul>
<li>Brookfield has secured an €11 billion loan to refinance Grifols’ €9.2 billion net debt, paving the way for a potential takeover and significant control over Grifols’ operations.</li>
<li>Grifols' Q3 results reveal 12% revenue growth, strong free cash flow, and lower net debt, with 2024 targets reaffirmed for 7%+ revenue growth, €1.8 billion EBITDA, and 4.5x leverage.</li>
<li>The narrowing discount between Grifols’ A and B shares signals market optimism, reflecting confidence in a takeover. This would be my preferred strategy of playing this situation.</li>
</ul>


Brookfield has secured an €11 billion loan to refinance Grifols’ €9.2 billion net debt, paving the way for a potential takeover and significant control over Grifols’ operations.
Grifols' Q3 results reveal 12% revenue growth, strong free cash flow, and lower net debt, with 2024 targets reaffirmed for 7%+ revenue growth, €1.8 billion EBITDA, and 4.5x leverage.
The narrowing discount between Grifols’ A and B shares signals market optimism, reflecting confidence in a takeover. This would be my preferred strategy of playing this situation.


Jesús is an Insight Provider (Event-driven) on the Smartkarma network, where he looks across sectors at opportunities arising from securities mispricing (both credit and equity), share classes, bid announcements, prospective bids, and special situations. He has served as Economic and Business Advisor at the Spanish Congress in Madrid. Prior to that, he has worked in the City of London: as a Credit Analyst at Bloomberg; Event-driven associate at former boutique European Research; and doubled as Special Situations and Equity-linked VP (convertible bonds) at Merrill Lynch. Jesús has an MBA from the London Business School, a BA (Hons.) degree in Economics from the Complutense University in Madrid, and a BA (Hons.) in Law from U.N.E.D., also in Madrid.