Mason Capital: Corporate Governance Failures, Shareholder Value Destruction by Grifols Board

 Sends Letter to Board Detailing Board’s Conflicts of Interest and History of Poor Capital Allocation

Expresses Urgent Need for Independent Directors and Proper Oversight to Unlock Value

Believes Rumored Brookfield Transaction Substantially Undervalues Grifols

Text of the letter follows:

November 8, 2024

Grifols, S.A.
Avinguda de la Generalitat 152-158
08174 Sant Cugat del Vallès
Barcelona - SPAIN

Dear Grifols Board Members and Shareholders;

Mason Capital is a significant Grifols shareholder, controlling ~2.1% of the Class A shares. The rumored Brookfield transaction is the product of improper corporate governance by a conflicted Board with a history of poor capital allocation. While the family and its related directors currently have de facto Board control, it is with only ~31% of the Class A voting shares. The remaining 69% can permanently fix the corporate governance failings at Grifols and unlock tremendous value by doing so. Brookfield is not needed.

The current board has a long history of poor capital allocation. As illustrated below, every large (€1bn+) transaction since 2014 has destroyed shareholder value. The transactions were 100% debt financed, resulting in approximately €4.5 billion of additional debt on Grifols’ balance sheet while only adding €136 million of economic EBITDA (measured for the trailing twelve-month period ended September 30, 2024) – an implied multiple >32x EBITDA. By comparison, Grifols’ stock currently trades for ~8.5x 2025E EBITDA per consensus estimates.

https://www.businesswire.com/news/home/20241107873955/en