Recordati: Palliser does not accept the takeover bid and seeks clarification from the board

At the heart of the dispute lies the interpretation of the press release issued by Recordati on 7 October, in which the board had welcomed the increase in the consideration. According to Palliser, the market may have interpreted that stance as an endorsement of the offer by the independent directors, without there being sufficient formal grounds to support this.

“Recordati’s press release of 7 October, in which the Board of Directors ‘welcomes’ the increase, has been widely interpreted as an endorsement by the independent directors. This is not the case,” the fund writes in the letter. The point, according to Palliser, is that the board’s expression of approval for the relaunch does not amount to a positive assessment of the fairness of the price, nor to a recommendation to accept the offer.

The dispute continues with regard to disclosure requirements. “It contains no statement to the effect that the independent directors consider the Offer to be fair, nor a reasoned opinion updated in accordance with Article 39-bis of the Issuers’ Regulations, nor a recommendation to accept the Offer” Palliser points out, highlighting the absence of an explicit position on the fairness of the offer and of a formal update to the valuation.

The fund therefore reiterates the position expressed by the board itself, according to which the final decision rests with individual shareholders, but warns of the possible consequences of an ambiguous interpretation of the press release. ‘If the market has misinterpreted the position of the independent directors, it is proceeding on the basis of an unfounded assumption at precisely the most critical stage of the Offer,’ the letter states.

Palliser is calling for two parties to publicly clarify the situation. On the one hand, Respighi BidCo and CVC, which, according to the fund, could stand to benefit from any misunderstandings regarding the position of the independent directors; on the other hand, the directors themselves, who are being asked to clarify whether they have revised the assessment made on 14 July, when the offer price was deemed inadequate.

Specifically, the fund is urging Respighi BidCo and CVC to ‘confirm whether, to the best of their knowledge, the independent directors have concluded that the Offer is fair or have recommended its acceptance’. It asks the independent directors, on the other hand, to “confirm whether they have reviewed their conclusion of 14 July 2026, according to which the offer price was inadequate, and whether they now recommend accepting the Offer at a price of 53 euros”.

The request comes at a particularly delicate stage of the transaction, with the fund seeking to secure an unequivocal position before the specified deadline. Palliser also sets out what course of action it will take in the absence of a response: “In the absence of such confirmation, Palliser – and, in its view, the other shareholders as well – will act on the assumption that the independent directors have not concluded that the price of 53 euros per share is fair and do not recommend the Offer,” states the fund.

With regard to the offer price, Palliser considers the revised offer of 1.71 euros per share – representing a 3.3 per cent increase – to be insufficient. The new offer price of €53 remains, in fact, less than one euro below the lower limit of the valuation range based on the discounted cash flow method (Discounted Cash Flow, DCF) set out by Rothschild in the fairness opinion prepared for the independent directors.

The indicated range is between 52.01 and 61.25 euros per share. Palliser also points out that this valuation precedes the publication of the results for the first half of 2026, during which the Rare Diseases business – identified by the fund as the group’s fastest-growing business area – recorded a 22 per cent increase at constant exchange rates.

A further point of comparison is the consensus target price compiled by Bloomberg, which stands at €60.10 per share, significantly higher than the €53 proposed in the offer. The fund’s position is clear: ‘Palliser does not support the offer and does not intend to tender its shares’.

Palliser’s position is summarised by James Smith, the fund’s chief investment officer, who takes issue with both the uncertainty surrounding the independent directors’ assessment and the scale of the counter-bid: ‘Shareholders are being asked to make a decision in the final days of the Offer without knowing where the independent directors stand: and this ambiguity benefits CVC alone.’

The manager therefore rejects the idea that the increase in the offer price could be considered sufficient to address the concerns raised by the fund: ‘A symbolic 3 per cent increase does not make this offer fair, nor does it resolve the conflicts of interest and the coercive structure underlying it’. This refers to the conflicts of interest and the structure of the transaction, which Palliser regards as central to his opposition to the offer, in addition to the issue of whether the price is fair.

According to Smith, the case could have implications that go beyond this individual case. “The outcome of this case involving one of the most important companies listed on the Milan Stock Exchange will set a precedent for minority shareholders throughout Italia,” concludes the CIO.

The request for clarification thus focuses on the role of independent directors and the transparency of the information available to shareholders during the final stage of the offer. For Palliser, the issue is not merely whether €53 represents an adequate price, but also whether investors can make their own decision whilst being explicitly aware of the valuation and any recommendation made by the independent directors.