Why Grifols (GRFS) Stock Price Moved Up 7% on Wednesday
Shares of Grifols GRFS rose nearly 7% on Aug 21 following a report issued by Bloomberg, which stated that Canada-based Brookfield Asset Management is in talks with banks to raise funds worth €9.5 billion ($10.6 billion) in debt for its potential acquisition.
Through these funds, Brookfield intends to refinance Grifols’ existing debt, which includes loans and high-yield bonds. While most of the funding will be in dollars, the participating banks would be requested to commit to providing the funds ‘before selling it on to investors.’
This need for refinancing is due to a clause in Grifols' existing debt agreements that would allow bondholders to demand early repayment at a premium if the company is taken private.
The above reports come a month after Brookfield and some key shareholders of Grifols expressed their intent for a potential takeover. These key shareholders are members of the Grifols family and are also the founding members of the company. Per a Reuters article, the Grifols family owns around 30% stake in the company.
If this deal goes through, the debt package will likely be €8 billion in drawn debt plus a revolving credit facility of up to €1.5 billion. Including this debt, Bloomberg believes that the Grifols buyout would likely rank as ‘the biggest takeover of a publicly-traded European company since at least 2022.’
Year to date, shares of Grifols have lost 33.7% compared with the industry’s 1.8% fall.
Image Source: Zacks Investment Research
The downside in shares is due to an attack by short-seller Gotham City Research in January, which released several reports accusing Grifols of overstating earnings and understating debt. These accusations were further exacerbated by negative news surrounding the company’s cash flows and subsequent accounting adjustments on investments in China. To address these concerns, the company appointed new management and even removed family members from executive roles.
Bloomberg claims to have contacted Brookfield, Grifols family and the company’s investors relations department, who have either declined to comment on the above news or are yet to respond.
Grifols, S.A. Price
Grifols, S.A. price | Grifols, S.A. Quote
Zacks Rank & Key Picks
Grifols currently carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the overall healthcare sector include Arcturus Therapeutics ARCT, Bioventus BVS and Fulcrum Therapeutics FULC. While Bioventus and Fulcrum sport a Zacks Rank #1 (Strong Buy) at present, Arcturus carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, estimates for Bioventus’ 2024 earnings per share have risen from 27 cents to 40 cents. Estimates for 2025 have increased from 43 cents to 45 cents during the same period. Year to date, shares of Bioventus have surged 73.1%.
BVS’ earnings beat estimates in three of the last four quarters and missed the mark on one occasion. Bioventus delivered a four-quarter average earnings surprise of 102.86%.
In the past 60 days, estimates for Fulcrum Therapeutics’ 2024 loss per share have improved from $1.24 to 48 cents. Estimates for 2025 have improved from $1.71 to $1.51 during the same period. Year to date, shares of Fulcrum Therapeutics have surged 41.3%.
Earnings of Fulcrum Therapeutics beat estimates in each of the last four quarters. Fulcrum delivered a four-quarter average earnings surprise of 393.18%.
In the past 60 days, estimates for Arcturus Therapeutics’ 2024 loss per share have improved from $4.39 to $2.60. Estimates for 2025 have improved from a loss of 45 cents to earnings of 21 cents per share during the same period. Year to date, shares of Arcturus Therapeutics have lost 30.6%.
Earnings of Arcturus Therapeutics beat estimates in each of the last four quarters. Arcturus delivered a four-quarter average earnings surprise of 56.73%.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Arcturus Therapeutics Holdings Inc. (ARCT) : Free Stock Analysis Report
Grifols, S.A. (GRFS) : Free Stock Analysis Report
Fulcrum Therapeutics, Inc. (FULC) : Free Stock Analysis Report
Bioventus Inc. (BVS) : Free Stock Analysis Report