Palliser Capital urges Recordati's board to withdraw support for CVC-GBL offer

By Reuters News

MILAN, Sept 14 (Reuters) - Activist investor Palliser Capital said on Monday it had urged Recordati's RECI.MI board to withdraw support for a €51.29 per share takeover offer from CVC Capital Partners and Belgian investment group Groupe Bruxelles Lambert GBLB.BR, arguing it materially undervalues the Italian drugmaker.

  • Palliser, which sent a letter to the board on September 1, said the consortium should raise its offer to at least €60 per share to provide fair treatment for minority investors.

  • Private equity firm CVC and GBL in May launched an all-cash offer for Recordati through the Respighi BidCo vehicle, valuing the company at about €10.7 billion ($12.35 billion) and aiming to delist it from the Milan stock exchange.

  • The offer has split Recordati's 10-member board, with six voting in favour of the offer, while four independent directors deemed it inadequate. Palliser noted that the offer was not endorsed by any independent directors.

  • CVC currently holds a majority stake in a vehicle called Rossini which controls a 46.8% interest in Recordati.

  • Palliser also said the deal structure put undue pressure on minority shareholders to tender, potentially leaving those who do not participate with illiquid, delisted stock.

  • Recordati's shares were trading 0.5% higher at €52.25 at 0820 GMT.

  • The tender offer opened on August 31 and is due to close on October 15.

  • Six minority shareholders, including several long-only investors, told the FT on Sunday they opposed the terms of the offer.

  • Respighi and Recordati did not immediately respond to a request for comment.

  • Respighi said in July that it disagreed with the independent directors' assessment, reiterated that the offer was fair and attractive, and said its terms and conditions were unchanged.

($1 = 0.8666 euros)

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