Stada slumps as Bain/Cinven offer fails
Shares in German pharmaceutical group Stada slumped on Tuesday after a takeover by private equity firms Bain Capital and Cinven failed to win the required shareholder support.
Stada Arzneimittel AG
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07:46 20/03/24
The offer from Bain and Cinven achieved a 65.62% acceptance, falling short of the revised 67.5% minimum hurdle, which was dropped down from 75%.
Stada took the opportunity to confirm its growth targets for the current financial year, saying it continues to assume group sales adjusted for currency and portfolio effects of €2.28bn to €2.35bn, adjusted earnings before interest, taxes, depreciation and amortisation of €430m to €450m and adjusted net income of €195m to €205m.
"The termination of the takeover offer will also have no effect on the medium-term growth targets for 2019 announced on March 17, 2017," it said. For 2019, the executive board continues to expect adjusted group sales of €2.65bn to €2.7bn, adjusted EBITDA of €570m to €590m and adjusted net income of €250m to €270m.
Olivetree Financial said the market will hold out some expectation of future M&A, "so expect to see the stock trade at a level which is a blend of standalone value and future M&A hopes".
"A true standalone valuation of Stada probably sits at around €52 per share nowadays, and sell-side target prices generally hover around the €55 level. It feels conceivable that the shares price around this higher level to reflect the hope (rather than the expectation) that an offer can be rekindled."
According to a report by Reuters, Bain and Cinven are in talks with investors - mainly with hedge funds - about the terms of a potential new offer for Stada. Before launching a new offer, however, the private equity firms were understood to want irrevocable commitments from investors that they will tender their shares.
At 1010 BST, the shares were down 4.4% to €59.07.