Stada takeover inches closer
- Bain Capital Private Equity and Cinven Partners have cleared the first bar in their attempt to take over the German generics and branded drugmaker Stada Arzneimittel, gaining more than 63% of the outstanding Stada shares before the end of the acceptance period, which ended on Aug. 16.
- Under the German Securities Acquisition and Transfer Act (WpÜG), a further two weeks' acceptance period will follow, ending on Sept. 1, to allow shareholders who haven't yet tendered their shares to make their move.
- The deal is being made through Nidda Healthcare Holding, the acquiring company for Bain and Cinven.
This particular takeover is taking a while. It began when Stada agreed to an initial offer of €66.00 per share (€65.28 plus €0.72 premium; around $5.6 billion) in April by Bain Capital and Cinven, beating a bid from Advent and Permir and all up against a demand for changes from activist investor Active Ownership Capital (AOC). This deal didn't meet the approval of the shareholders, falling short of the minimum acceptance threshold of 67.5%, down from 75%. The next try increased the offer to €65.53 plus a dividend of €0.72, or €66.25 per share (around $6.3 billion), with a minimum acceptance threshold of 63%, and it has squeaked through at 63.9%.
"We are pleased that the required majority of Stada’s shareholders has decided to accept our very attractive second takeover offer. This confirms that the decision to relaunch the offer was in the best interest of the company and its shareholders," said Dwight Poler and Michael Siefke, managing directors at Bain Capital.
If Bain and Cinven reach 75% of voting shares, it will give them fuller control of the company and allow them to tap into cashflow. Yet, the 11+% needed to hit this level may hold out for a bit more cash.
Bain and Cinven are still hopeful, and plans are in train for what happens next. According to Supraj Rajagopalan and Bruno Schick, partners at Cinven, the next step after the closing of the transaction will be to strengthen Stada’s existing operations and growing the company through investment in growth and expansion through acquisitions.
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