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Recordati shares rise as investors reportedly circle CVC stake

Published 06/18/2024, 06:37 AM
Updated 06/18/2024, 06:40 AM
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MILAN (Reuters) - Shares in Italian drugmaker Recordati rose almost 3% on Tuesday, boosted by a report that investment funds KKR and TPG had expressed preliminary interest in buying a stake in the company.

Speculation about the future of Recordati has increased after majority shareholder CVC Capital Partners hired investment banks JP Morgan and Goldman Sachs to explore options for the pharmaceutical group.

The private equity firm, which owns 51.8% of Recordati, is considering all options, including a sale, a merger with another healthcare company, sources told Reuters last month.

Milan-listed Recordati has a market capitalisation of about 10 billion euros ($10.7 billion).

KKR and TPG are among those to have expressed initial interest in Recordati, Bloomberg reported late on Monday.

The buyout firms have made preliminary proposals to acquire part or all of CVC's stake in Recordati, the report added.

CVC also received separate interest from Italy's Angelini Pharma, according to the report.

All parties involved declined to comment or were not immediately available to comment.

"We believe that these press rumours .. could reignite speculative appeal on the stock," a Milan-based broker said.

CVC paid around 3 billion euros when it bought its stake in the company from the founding family in 2018.

A source familiar with the matter said CVC is working to refinance debt issued by the vehicle through which the fund controls Recordati.

"We do not rule out that options could also include simply refinancing the debt of the Rossini parent company whose 1.3 billion euro bonds mature in October 2025," broker Equita wrote in its daily report.

Recordati, which makes treatments for cardiovascular illnesses, urological, gastrointestinal diseases and rare diseases, posted revenues of 2.08 billion euros in 2023, with core earnings of around 770 million euros.

It traces its roots to a family-run pharmacy set up in northern Italy in the 1920s.

($1 = 0.9331 euros)

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