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Bain, Cinven give in to Elliott's demand for higher Stada buyout
September 4, 2017 / 5:38 AM / 19 days ago

Bain, Cinven give in to Elliott's demand for higher Stada buyout

FRANKFURT, Sept 4 (Reuters) - Buyout groups Bain Capital and Cinven said they would propose to Stada’s management to offer minority shareholders cash compensation of 74.40 euros per share, giving in to pressure from activist investor Elliott.

Bain and Cinven last month won control of German generic drug maker Stada with a sweetened 5.3 billion-euro ($6.3 billion) bid, in the largest private-equity funded takeover of a German listed company, offering 66.25 euros per share.

They had secured acceptances for close to 64 percent of Stada’s shares, but they are trying to win the backing of more than 75 percent of shareholders so they can tap into Stada’s cashflow.

Elliott Management had said on Thursday, however, that it wanted at least 74.40 euros per share for its stake, which most recently stood at 13.3 percent, or 15.2 percent when taking stock options into account.

Bain and Cinven said in a statement late on Sunday that while they were “convinced that the fair value of Stada shares is below the price required by Elliott” they would propose offering minority shareholders 74.40 euros in cash per share.

“Bain Capital and Cinven firmly believe that Stada, its business and its stakeholders substantially benefit from certainty on the success of a DPLTA (profit and loss agreement),” they said.

With the shares ending Friday’s trading session at 79.50 euros, buyers of the stock appeared to be betting on an even higher compensation deal than Elliott demands.

$1 = 0.8418 euros Reporting by Maria Sheahan; Editing by Stephen Coates

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