GBL and Recordati: persuading sellers now comes at a higher price

An investment holding company needs both funding and willing sellers to complete an acquisition. Raising the price may help secure the deal, but it also leaves the business with more capital to earn a return on. GBL’s involvement in the Recordati offer makes that trade-off tangible.

On 6 October, the consortium including GBL raised its offer for the Italian drugmaker from €51.29 to €53 a share and extended it to 23 October. Teleborsa bulletins recorded another 955,751 shares on 7 October, followed by just 24,840 the next day. Total acceptances reached 99.83 million shares on 8 October.

One strong session therefore tells us little about the pace ahead. Two questions matter: how many more shares are needed, and how much capital will GBL ultimately commit?

Rossini is selling. A new team is buying

Rossini holds the large Recordati block, representing 46.82% of share capital. The vehicle belongs to CVC Fund VII and has committed to tender its shares.

On the buying side are CVC Fund IX and GBL, alongside their partners. Black Mountain is GBL’s investment vehicle for the transaction. Andrea Recordati, a member of the drugmaker’s founding family, is also taking part in the new ownership structure. The family and Rossini have different roles.

Why are two CVC funds involved? An older fund can sell an investment to a newer fund alongside fresh partners. Capital changes hands. GBL shareholders need to assess what the incoming owners can achieve with Recordati at the price paid.

€53 to receive, €53.71 for comparison

A shareholder tendering a share now will receive €53 under the offer terms. The announcement also cites €53.71. That figure includes the €0.71 dividend paid in May and compares the total received by a shareholder who held the share through that distribution.

The €1.71 increase is 3.33% above the previous offer price. Across all shares covered by the offer, it adds approximately €339.5m to the maximum consideration, bringing it to €10.52bn. That is the consortium’s envelope. The announcement does not detail GBL’s additional contribution.

How far have the buyers come?

The acceptance bulletin uses the shares covered by the offer. At 8 October, 99.83 million tendered shares represented 50.28% of that base. Tracking the 66.67% target requires switching to total Recordati share capital and adding shares already held outside the offer. The gauges make that change of base visible.

Including the physical holdings GBL and CVC disclosed in July, assumed unchanged, our reconstruction reaches 52.80% of share capital. CVC also has a contract that could deliver 10.25 million shares. Full delivery, without overlap, would lift the total to 57.70%.

The remaining gap would then be about 18.75 million shares. Without that delivery, it would be 29.00 million. These scenarios provide a progress marker. Any purchases since July could change the distance still to travel.

The large tally and the small balance

Rossini’s committed block accounts for most acceptances. Subtracting it from the 8 October tally leaves 1.91 million shares, up from 369,202 on 16 September. That balance represents approximately 0.91% of share capital.

The chart reveals what the headline tally conceals: a sizeable increase on 7 October, followed by a much smaller addition on 8 October. The bulletins do not name the sellers. They track the quantities, while each shareholder’s reasons for selling remain their own.

What matters to GBL shareholders

Recordati develops and sells medicines, including treatments for rare diseases and specialist care. For the holding company led by Ian Gallienne, the transaction deepens its investment in healthcare and privately held businesses whose development it can influence.

The original May plan envisaged up to approximately €1.3bn from GBL, including shares already purchased. That was close to 10% of its end-March net asset value. The price has now changed. The key information will be GBL’s final contribution, its rights within the consortium and the returns achievable on the updated investment.

The next milestone is the scheduled 23 October closing. Payment is set for 2 November, with a possible reopening from 3 to 9 November. The 66.67% threshold remains an offer condition that can be waived under its terms. Delisting also depends on further rules and steps.

How we counted

Acceptance figures come from Teleborsa’s 8 October bulletin, carried by La Repubblica at 18:45. This is an agency bulletin rather than the bidder’s final statement. Reference share capital is 209,125,156 shares. The offer covers 198,525,562 shares.

The scenarios add July’s holdings of 6,800,946 GBL shares and 3,798,648 CVC shares to 99,825,059 acceptances, assuming those holdings are unchanged. The upper scenario adds 10,250,000 distinct shares delivered under CVC’s contract. The exact gaps are 28,999,089 and 18,749,089 shares. The 6 October announcement permits further CVC purchases and extends the contract’s maturity to 2 November. The final statement will establish actual ownership.

The balance excluding Rossini assumes its 97,912,463 shares are fully included in each tally. Observations are dated 16, 22 and 28 September, then 2, 5, 7 and 8 October. The €1.3bn and 10% figures describe the original plan and March net asset value. Maximum additional consideration uses all shares covered by the offer. The English 6 October announcement is a courtesy translation, with the Italian version prevailing.

Correction to our 17 September article: the 16 September tally was 98,281,665 shares. The 98,281,125 quoted belonged to 15 September. The distance to the threshold also needs to include shares held outside the offer. Our analyses of the original offer and its financing provide the background to this update.