Grifols (NASDAQ:GRFS) shares shot up by nearly 22% in the premarket session today. The surge followed an approach by its founding family and Brookfield to acquire and delist the Spanish pharmaceutical company. The development comes after Grifols faced a short-seller attack earlier this year.
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The Takeover Bid
The Grifols family and Brookfield are evaluating a potential joint takeover of Grifols, which would involve acquiring all outstanding shares and taking the company private. However, Grifols noted that it is not certain if the deal will materialize, and the company is not aware of the potential terms under which it would go private.
Short Seller Action in Grifols
Still, today’s price rally has come as a relief to Grifols’ shareholders, who have seen losses of over 67% in their GRFS investment over the past five years. Shares of the company have plunged by roughly 39% year-to-date amid two short reports from Gotham City Research.
Following Gotham’s report, GRFS removed all Grifols family members from executive positions and brought in a new CEO and CFO. Gotham had accused Grifols of manipulating its debt and profit figures. Currently, Grifols family members and their associates control nearly 30% of the company.
Is Grifols Stock a Buy, Sell, or Hold?
Meanwhile, Deutsche Numis’ Emmanuel Papadakis, the sole analyst tracking Grifols at present, recently upped his rating on the stock to a Hold from a Sell. However, the analyst did not assign any price target for Grifols. The stock is currently trading at a price-to-earnings multiple of 28.1.
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