Recordati shares fall; shares set for delisting following the closure of the takeover bid

(Il Sole 24 Ore Radiocor) - Recordati under pressure on the Milan Stock Exchange following the conclusion of the takeover bid by the CVC and GBL funds. The Respighi vehicle’s stake rose to 74.58 per cent of the company’s share capital following the tender of 129.98 million shares, representing 62.15 per cent of the share capital and 65.47 per cent of the shares subject to the takeover bid, with a total value of approximately 6.89 billion euros. During the transaction, CVC also purchased 15.39 million shares on the open market, representing 7.36 per cent of the share capital.

Overall, therefore, Respighi now holds 74.58 per cent of Recordati’s share capital and has exceeded the minimum acceptance threshold of 66.67 per cent. The period for the reopening of the offer is scheduled for 3 to 9 November. “The provisional acceptances, combined with the market purchases made by CVC and the shareholdings already held by CVC (1.82 per cent) and GBL (3.25 per cent), bring the total stake attributable to the offerors to approximately 74.58 per cent of Recordati’s share capital”, emphasise analysts at Banca Akros. Consequently, “the offerors already have full control of the extraordinary general meeting of shareholders prior to the reopening of the offer period” and this will enable them, at a later stage, “to proceed with the delisting of the company through a merger with the parent company”.

‘If the final shareholding remains below 90 per cent, delisting will be pursued through this merger, subject to approval by Recordati’s corporate bodies,’ Akros continues. “If, at the end of the extended offer period, the bid takes CVC and GBL above the 90 per cent threshold, the offeror will initiate the compulsory purchase procedure for the remaining shares” and “the obligation to purchase the remaining shares will be triggered”.

“Whilst we continue to believe that, based on our fundamental assessment, Recordati’s potential value exceeds the takeover bid price” of 53 euros per share, “in light of the outcome of the takeover bid, we are aligning our target price with the bid price” and “we are changing our recommendation from ‘Buy’ to ‘Accumulate’”, Akros states.

Even Intermonte’s experts believe that the takeover bid price is not commensurate with Recordati’s value and falls short of their target price of 71 euros. “However, the pressure to tender shares could prove a decisive factor in view of the reopening of the offer period, given Respighi’s determination to proceed with the delisting by merging Recordati into the unlisted vehicle, even with a stake of less than 90 per cent,” the experts write. Added to this “are the recent uncertainties surrounding Isturisa, the main driver of long-term value creation, with peak sales expected to exceed 1.2 billion by 2032–33, following the recent patent dispute. The company has reassured investors regarding the strength of its patent protection and the 30-month protection period that would delay any entry by a generic manufacturer.” In summary, therefore, “the risk of indirect delisting via a merger with Respighi and the increased uncertainty surrounding Isturisa could encourage further subscriptions during the reopening of the subscription period”.