Key Takeaways
- • CVC Capital Partners and Groupe Bruxelles Lambert raised their take-private offer for Italian pharma company Recordati to €10.5bn ($11.8bn), increasing the per-share price to €53 from €51.29, citing this as a final bid.
- • The revised offer responds to sustained shareholder opposition, including criticism from Recordati's own independent directors who deemed the original price financially inadequate, and pressure from activist investor Palliser Capital who demanded €60 per share.
- • Recordati shares initially rose 1.8% to €53.15 on the announcement, though some analysts including Paola Saglietti of Banca Akros remain skeptical, contending the valuation fails to reflect the company's standalone value and growth trajectory.
- • CVC already controls approximately 50% of Recordati following a May agreement to acquire remaining shares; the transaction is intended to result in delisting, with the acceptance period extended to 23 October.
Summary
CVC Capital Partners and investment partner Groupe Bruxelles Lambert have increased their take-private proposal for Recordati, the Italian pharmaceutical company, to €10.5bn after facing significant shareholder backlash over valuation concerns. The revised offer raises the cash consideration to €53 per share from the originally proposed €51.29, according to Bloomberg. The sponsors declared this revised price as final and stated it will not be increased further.
The bid increase reflects mounting opposition from minority investors and internal board dissent. Recordati's independent directors had publicly opposed the original July proposal, contending it was financially inadequate. Activist investor Palliser Capital escalated pressure by urging the board to reject the deal unless CVC increased its offer to €60 per share, arguing that minority shareholders faced excessive coercion to accept the original terms. CVC justified the new €53 price as representing full and fair value by accounting for Recordati's standalone prospects alongside broader valuation declines across European healthcare and specialty pharmaceutical sectors.
Despite the price increase, skepticism persists among market observers. Paola Saglietti of Banca Akros characterized the €53 offer as unattractive and inadequate relative to Recordati's standalone value and growth potential. Recordati's stock nevertheless rose as much as 1.8% to €53.15 in Milan trading following the announcement; the shares had traded above €46 before CVC disclosed its expression of interest in late March. CVC, which already holds nearly 50% of Recordati following a May acquisition agreement for remaining shares, extended the offer acceptance period by eight days to 23 October to allow shareholders time to evaluate the revised proposal.
The bid increase reflects mounting opposition from minority investors and internal board dissent. Recordati's independent directors had publicly opposed the original July proposal, contending it was financially inadequate. Activist investor Palliser Capital escalated pressure by urging the board to reject the deal unless CVC increased its offer to €60 per share, arguing that minority shareholders faced excessive coercion to accept the original terms. CVC justified the new €53 price as representing full and fair value by accounting for Recordati's standalone prospects alongside broader valuation declines across European healthcare and specialty pharmaceutical sectors.
Despite the price increase, skepticism persists among market observers. Paola Saglietti of Banca Akros characterized the €53 offer as unattractive and inadequate relative to Recordati's standalone value and growth potential. Recordati's stock nevertheless rose as much as 1.8% to €53.15 in Milan trading following the announcement; the shares had traded above €46 before CVC disclosed its expression of interest in late March. CVC, which already holds nearly 50% of Recordati following a May acquisition agreement for remaining shares, extended the offer acceptance period by eight days to 23 October to allow shareholders time to evaluate the revised proposal.
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