#None #Biotest AG #Grifols SA #Westbourne River

Westbourne River Partners Raises Concerns on Grifols' Delisting Offer for Biotest AG

In a recent communication addressed to Biotest AG, Westbourne River Partners, a significant minority stakeholder in the company, expressed vehement opposition to the delisting proposal initiated by Grifols S.A. This letter, sent to Biotest's management, emphasized a range of apprehensions regarding the implications of such a decision, particularly for minority shareholders who may face adverse consequences.

Westbourne River Partners, the largest minority shareholder in Biotest, believes the management board's support for the delisting is a troubling indication of its prioritization of the majority shareholder’s interests over those of all shareholders. The partnership cited specific concerns regarding the seemingly strategic motives behind the delisting, suggesting that it may be an attempt to coerce minority shareholders to sell their shares at an undervalued price.

The letter detailed two structural measures available under German law that Grifols could pursue to fully integrate Biotest into its operations: a squeeze-out or a domination agreement. Westbourne argues that Grifols, holding 97% of the shares, is instead opting for a delisting to reduce transparency and diminish minority shareholders' ability to monitor the company's health and operational performance.

During an investor event held in February 2025, Grifols expressed intentions to streamline the integration process with Biotest. Still, according to Westbourne, the suggested delisting contradicts this plan, making it imperative for management to reassess their decision. Grifols’ actions may imply a strategy aimed at scaring minority shareholders into tendering their shares based on potentially misleading premises surrounding the company's value and future prospects.

Westbourne further exemplified its concerns with financial inconsistencies observed in Biotest’s recent cash flow assessments. The company had previously anticipated a notable cash burn during the fourth quarter of 2024. However, the fiscal results revealed a surprising cash inflow, highlighting discrepancies in projections that could have adversely impacted shareholders' perceptions of the company’s worth. Furthermore, recent predictions for an operating loss in 2025 contradict the previous year’s profitable performance, raising questions about the credibility of management's guidance.

The potential negative impact of delisting on share prices and the valuation process was also detailed in their correspondence. Without the oversight associated with a publicly listed company, minority shareholders would struggle to hold the management accountable in any upcoming valuation discussions or decisions surrounding structural changes. This absence of transparency post-delisting could impair the minority stakeholders' ability to challenge potentially manipulative management practices that might arise.

Moreover, there have been significant market opportunities identified by Grifols on Biotest's upcoming product launches, which could significantly boost the company's valuation. Westbourne highlights the risk that minority shareholders might miss out on these benefits if the delisting leads to a lack of information and accountability.

Considering the gravity of these concerns, Westbourne River Partners urged Biotest’s management to reconsider the delisting offer and the pricing terms attached. They referenced previous valuations from 2021, pointing out the disparity between those figures and the current offer, which they believe undervalues the company’s progress and market potential over the years. The letter concluded with a firm request for a reevaluation of these actions, demanding transparency and fairness for all shareholders involved.

In summary, the letter from Westbourne River Partners highlights critical issues associated with the proposed delisting of Biotest AG by Grifols, particularly relating to minority shareholder rights and the integrity of company valuation processes. The call for enhanced transparency and reevaluation stands as a strong reminder of the responsibilities management has towards all shareholders, particularly those holding a minority stake.

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