Current Discount: 36%
Average Discount: 28%
Expiration Date: TBD
This idea was shared by DiSam
Grifols is a Spanish pharmaceutical and chemical manufacturer (primarily blood-plasma based products). The company is listed on Madrid’s Stock Exchange with two classes of shares – voting class A (GRF.MC) and non-voting class B (GRF-P.MC) preference shares. Class B shares are also listed on Nasdaq.
Class B shares non-voting shares used to trade at a discount to ordinary GRF shares. Due to the recent market turbulence, the discount has widened from the average 28% to the current 36%, which marks an opportunity to play on the eventual discount mean reversion and pocket in 8% profit.
There are 426m class A shares, however, 43% of them are held by the founding family and certain significant holders. 261m of class B shares are all free-float.
Both classes receive nearly the same dividend payments. Preferred shares are eligible to €0.01/share preferred dividends, which are paid in Q2 of the following year. It seems that so far the final payment for 2019 hasn’t been done yet and I haven’t found any information on that from the company. Anyways, this €0.01/share payment should play no part in the discount of this size.
There’s plenty of borrow for hedging on IB at <1%/year fee.
1 thought on “Grifols (GRFS) – Discount Mean Reversion – 8% Upside”
Apparently in 5 months now, the discount did not reverse even slightly. With no apparent catalyst or clear timing ahead, the idea is closed with -1% in 5 months.