Palliser Capital Pressures Recordati Board Over €51.29 CVC-GBL Takeover Offer
Activist Investor Challenges and Board Response
Palliser Capital's Objections to the Takeover Offer
MILAN, Sept 14 (Reuters) - Activist investor Palliser Capital said on Monday it had urged Recordati's board to withdraw support for a €51.29 per share takeover offer from CVC Capital Partners and Belgian investment group Groupe Bruxelles Lambert, arguing it materially undervalues the Italian drugmaker.
Call for a Higher Offer
• Palliser, which sent a letter to the board on September 1, said the consortium should raise its offer to at least €60 per share to provide fair treatment for minority investors.
Details of the CVC-GBL Offer
Structure and Value of the Bid
• Private equity firm CVC and GBL in May launched an all-cash offer for Recordati through the Respighi BidCo vehicle, valuing the company at about €10.7 billion ($12.35 billion) and aiming to delist it from the Milan stock exchange.
Board Division Over the Offer
• The offer has split Recordati's 10-member board, with six voting in favour of the offer, while four independent directors deemed it inadequate. Palliser noted that the offer was not endorsed by any independent directors.
Majority Stake and Shareholder Concerns
• CVC currently holds a majority stake in a vehicle called Rossini which controls a 46.8% interest in Recordati.
• Palliser also said the deal structure put undue pressure on minority shareholders to tender, potentially leaving those who do not participate with illiquid, delisted stock.
Market Reaction and Shareholder Opposition
Share Price Movement
• Recordati's shares were trading 0.5% higher at €52.25 at 0820 GMT.
Tender Offer Timeline
• The tender offer opened on August 31 and is due to close on October 15.
Minority Shareholder Dissent
• Six minority shareholders, including several long-only investors, told the FT on Sunday they opposed the terms of the offer.
Responses from Involved Parties
Company and Bidder Statements
• Respighi and Recordati did not immediately respond to a request for comment.
• Respighi said in July that it disagreed with the independent directors' assessment, reiterated that the offer was fair and attractive, and said its terms and conditions were unchanged.
Exchange Rate Information
($1 = 0.8666 euros)
Reporting Credits
(Reporting by Elisa Anzolin; Editing by Kirsten Donovan)