Private equity firm CVC Capital Partners and investment holding company Groupe Bruxelles Lambert (GBL) have cleared a key hurdle in their takeover of Italian drugmaker Recordati, but they haven't crossed the finish line. After raising their offer to €53 per share, the consortium ended the initial acceptance period with 74.3% of Recordati's shares, according to a regulatory filing. That comfortably exceeds the 66.7% minimum they had set as a condition, but it falls short of the 90% threshold needed to delist the company from the stock exchange.
What the numbers mean
The 74.3% stake implies an equity value for Recordati of roughly €11 billion, based on the €53-a-share price. For context, Recordati is a mid-sized pharmaceutical company that develops and markets drugs for rare diseases, cardiovascular conditions, and urology, among other areas. It has been listed on the Milan stock exchange for decades, and its shares have been a steady performer for investors seeking exposure to the healthcare sector.
The consortium's offer is now in a critical phase. The bid will reopen from November 3rd to 9th, giving remaining shareholders a second chance to tender their shares. If the consortium still cannot reach the 90% level, it has flagged a backup plan: a merger. This would be a legal maneuver that could allow the buyers to squeeze out minority shareholders even without hitting the 90% threshold, though it would likely involve a longer process and potentially different terms.
Why the 90% threshold matters
In Italian takeover rules, reaching 90% of a company's shares is the magic number that allows a bidder to force a delisting and buy out the remaining minority shareholders. Below that, the company must remain listed, and minority shareholders keep their stakes. For CVC and GBL, the goal is likely to take Recordati private, giving them full control to restructure and invest without the scrutiny of public markets.
The fact that they've cleared the 66.7% minimum means the deal is now binding — they must proceed with the purchase. But the shortfall means they haven't yet achieved their ultimate objective. The reopening period is their chance to mop up more shares, but there's no guarantee they'll reach 90%.
What it means for investors
For everyday investors who hold Recordati shares, the situation is straightforward but important. If you haven't tendered your shares yet, you have another window from November 3rd to 9th to accept the €53 offer. That price represents a premium to where the stock traded before the bid was announced, but it's also the price the consortium is willing to pay — and it may not go higher.
If the consortium fails to reach 90%, the company will remain listed, and your shares will continue to trade. However, the stock price could become more volatile, as the market will be uncertain about the eventual outcome. In similar situations, shares often trade at a discount to the offer price if investors doubt the deal will close, or at a premium if they expect a higher bid.
It's also worth noting that the merger backup plan could lead to a different outcome. If the consortium pursues a merger, minority shareholders might be forced to accept a deal at a price determined by a court-appointed expert, which could be higher or lower than €53. This adds an element of uncertainty.
Broader context
This deal is part of a wave of private equity activity in European healthcare. Drugmakers with stable cash flows and strong product portfolios are attractive targets for buyout firms, which can use debt to amplify returns. CVC and GBL are both well-known investors; CVC is one of Europe's largest private equity firms, while GBL is a holding company with a long history of taking stakes in European companies.
The outcome of this bid will be closely watched by other potential acquirers and by investors in similar mid-cap pharma companies. If the consortium succeeds in taking Recordati private, it could encourage more buyout attempts in the sector. If it fails, it might signal that minority shareholders are willing to hold out for better terms.
What to watch next
The key date is November 3rd, when the bid reopens. Investors should monitor the consortium's announcements during that week to see if they're approaching the 90% threshold. If they get close, they might extend the offer or sweeten the terms. If they don't, they could trigger the merger process, which would be a longer and more complex path.
For now, Recordati shareholders have a clear choice: accept €53 a share, or hold on and see what happens. The reopening period is their chance to decide, and the outcome will shape the company's future — and their own returns.
