#London #United Kingdom #Biotest AG #Grifols SA #Westbourne River

Westbourne River Partners' Letter to Biotest AG

On April 15, 2025, Westbourne River Partners, representing the largest minority stakeholder in Biotest AG, raised significant concerns over the delisting proposal initiated by Grifols S.A. aimed at Biotest's shareholders. The letter, addressed to Biotest's attention, particularly the CEO Peter Jannsen, detailed an array of apprehensions regarding the implications of the decision to support the delisting.

Background

Grifols had previously signaled its strategic intent to absorb Biotest into its larger operations, indicating that such integration would necessitate a structural mechanism under German law. With Grifols holding a dominant voting influence of 97%, the situation puts minority shareholders in a precarious position. A delisting, as described by Westbourne, appears as an effort not merely to streamline operations but to manipulate the market to dissuade minority shareholders from valuing their stakes appropriately.

The Dangers of Delisting

Westbourne articulates that delisting would impair transparency and reduce the obligations for financial disclosure that Biotest currently maintains. This reduction in clarity could hinder minority shareholders' ability to monitor the company’s developments leading up to any potential structural adjustments Grifols might pursue in the future. Moreover, the potential for a lack of liquidity in Biotest's shares post-delisting raises overhanging doubts regarding the fairness of the stock prices put forth by Grifols.

Interestingly, Westbourne flagged a stark discrepancy in the financial guidance offered by Biotest's management compared to its outcomes. In a puzzling turn of events, anticipated cash burns of €50-80 million were contradicted in actual results, which revealed a cash inflow of €40 million. The letter points to the unsettling manipulation of financial projections that could unfairly disadvantage the minority shareholders should Grifols advance a squeeze-out or domination agreement.

A Call for Reconsideration

The message also underlined the prospect of undervaluation, raising questions about the pricing terms presented under Grifols’s offer. The letter drew comparisons to a prior acquisition bid made by Grifols in 2021, which touted higher share values than those currently on the table. This deeply concerns Westbourne, suggesting a dire lack of integrity in the dealings with minority shareholders who are now faced with depreciated buyout prices which they believe don’t reflect fair market value.

Westbourne urges Biotest’s board to undergo a reassessment of the current delisting proposal, pushing for an adjustment to the offer prices that mirror the appropriate business valuation grounded in realistic financial plans. They advocate for detailed disclosures of mid-term strategies, specifically addressing vital projects like the launch of Fibrinogen and progress on Trimodulin, which are anticipated to bring substantial market opportunities.

Ultimately, Westbourne's letter serves as a robust reminder that shareholder rights must be paramount in these negotiations. The response from Biotest’s management remains paramount, hence, a transparent and just strategy must be a priority over any aspirations of consolidation from Grifols. Without fostering equitable conditions for all stakeholders involved, the company risks steering into contentious territory that could damage its reputation and investor trust.

Conclusion

In summary, the correspondence from Westbourne River Partners highlights pressing concerns regarding Biotest AG's involvement with Grifols's delisting offer. The advocacy for minority shareholders reinforces the need for accountability and transparency within corporate governance, particularly in challenging scenarios where market players hold disproportionate influence.