The president of Grifols, Thomas Glanzmann, reiterated yesterday in a conference before analysts and international investors that the report of the vulture fund Gotham City Research that questions its accounting is “absolutely wrong” and that the accusations “are false and speculative “. “It takes old information that had already been publicly communicated and had been reviewed and approved by the regulators and the auditor, in order to suggest irregularities, for its speculative interest.” This intervention did not convince the financial markets, however: the share closed with a fall of 16%, to 9.89 euros, after having risen by 12% on Wednesday.
Glanzmann, flanked by the top managers of the group, explained that the CNMV has requested from the company more information about the operations denounced by Gotham, and especially about the relations with Scranton, an investment holding in which members of the Grifols family participate. Glanzmann assured that he will send the information “as soon as possible”, for which he has a deadline of ten days. Glanzmann was “proud” of Grifols’ governance, but also committed to improving it.
CNMV sources indicated that the supervisor “is looking at everything to evaluate the situation”. “The important thing is that the veracity of the accounts of a listed company has been called into question”, they said. The inquiries are focused exclusively on Grifols for the moment, but if they do not lead to significant aspects, the supervisor could turn to the bearish fund Gotham City Research, with which there has been no contact.
Glanzmann, accused by Gotham of “being a Grifols in everything but name”, explained that Scranton is a traditional shareholder of Grifols and has always supported the company. “It brings together 22 investors, of which only three are from the family and have 20% of the capital”, he assured, which is why, in his opinion, it is not a family office of the founding family.
Grifols only has two commercial relationships with Scranton, he pointed out: it is the owner of the headquarters in Sant Cugat and other properties of the group, for which it receives 6.3 million euros annually, “a market income”, and the owner of Biotest and Haema, the two companies that Gotham puts in the spotlight. Glanzmann assured that the company does not plan to buy the assets of this company, nor does it plan to change its relationship with Scranton.
Glanzmann, as well as the financial director of the group, Alfredo Arroyo, assured that the consolidation of the two companies is done according to international accounting standards and that is why it has been endorsed year after year by the auditors, who are KPMG.
Arroyo assured that, contrary to the Gotham report, the two companies only contribute 30 million euros to the group’s operating profit or ebitda (2%, since this year they expect it to reach 1.45 billion euros). In the accounting adjustments of the consolidation, Arroyo added, the part of the profit corresponding to the shares not owned by the group is subtracted, so that in both cases it is reduced to 100%, while in the case of the subsidiary of the United States, Grifols Diagnostic Solutions, which also disputes the Gotham report, are reducing the portion they do not control, by 45%.
That is why the income of the companies of the plasma centers is consolidated by Scranton in its accounts, and the last attack made by the vulture fund yesterday morning, in a publication on the X network (Twitter), in which it mocked what considered double attribution of income. “Gotham has no idea about the business”, he stressed.
Arroyo noted that the group plans to simplify the business structure in acquisitions and added that “the best argument against bearish attacks is the improvement of operations and the growth of operating profit and the reduction of debt.”
However, Glanzmann insisted that the firm will take legal action against Gotham City. “We will not allow the damage they have done to the company, the shareholders and all stakeholders to go unanswered.”
