Stada’s rumoured suitors Bain and CVC have yet to make formal approaches
- Vinculated shares status change and AOC proxy fight seen as catalysts
- Stada advised by Deutsche Bank and Perella Weinberg
Stada Arzneimittel's [ETR: SAZ] prospective suitors Bain and CVC have not yet made formal approaches for the acquisition of the company, according to a source and a person familiar with the situation.
Bain is not officially confirmed yet but is likely to be the third fund interested, the person said. CVC, which was also rumoured to be in talks to acquire Stada, has not yet expressed an interest, the source and person said.
The German company has so far received two formal approaches from Advent International Corporation and Cinven Partners, the person said. The company has not received any approaches from strategic players, the person added.
Stada has been a takeover target for years but the new management structure, the AOC activist proxy fight and the changes in the company’s vinculated shares status were certainly catalysts to recent approaches, the source and a sector banker said.
Last summer, Active Ownership Capital (AOC), a German activist shareholder which has a 7% stake in Stada, won a proxy fight, leading to the replacement of multiple members of the company’s Supervisory Board. In addition, Stada has changed the status of its so-called “vinculated” shares, which were a potential takeover hurdle. Under German securities trading laws these shares could only change hands with the consent of top managers or otherwise the shares would have lost their voting rights.
On 23 February, Advent made a binding offer of EUR 58 per share plus 2016 dividend limited only until Monday 27 February. Prior to this, Cinven had made a non-indicative bid at EUR 56 per share, subsequent to which Stada disclosed a EUR 58-per-share non-binding expression of interest from an unnamed bidder.
Investors are expecting a higher valuation than the EUR 58 figure that is being discussed, a Stada minority shareholder said. If you can increase the margin by 10 percentage points, then you can certainly offer more than that, he added.
There is always room to increase the current highest bid, should it be needed, the source said, describing the EUR 58 per share offer as a fair valuation, with high multiples.
It is unlikely that the private equity suitors would need to team up to finance the acquisition as most of them can handle the tickets, the source and first sector banker agreed. Approaches from smaller family funds have been dismissed by at least one of the private equity suitors, the source said.
Stada is receiving financial advice from Deutsche Bank and Perella Weinberg on the PE funds' approaches, the source and the person said.
Deutsche Bank declined to comment. Perella Weinberg did not respond to a request for comment.
The PE funds would likely keep Stada as it is after the acquisition, the source and first banker said. The company’s OTC unit is its crown jewel, and PEs would not likely break it up but would grow it and then sell it at a later stage, they added.
AOC called earlier today (24 February) for the German company to initiate a non-biased, transparent and structured sale process.
Advent’s EUR 58-per-share offer has a deadline of 27 February for the company to respond. If Stada declines the offer then it is understood Advent will walk away, but if it is accepted, the negotiations can start. However, as it is a listed company, there is always the prospect of a rival bid after the offer is accepted, it was said.
Stada declined to comment.