BARCELONA (Reuters) -Spanish pharma company Grifols said on Wednesday it will launch legal action against short-seller fund Gotham City Research which released a negative report that wiped almost $3 billion off the Barcelona-based firm’s market value on Tuesday.
Grifols will seek compensation in court for the financial and reputational damage to the company and its shareholders as well as for causing great concern among its customers and blood donors, it said in a statement.
Grifols, which makes medicines with human plasma, earlier said the Gotham City report was based on “false information” and denied all the allegations. Still, its shares fell 30% on Tuesday.
The company also said its board fully supported Chief Executive and Executive Chairman Thomas Glanzmann.
In its Tuesday report, Gotham City questioned Grifols’ reported debt and earnings before interest, taxes, depreciation and amortisation (EBITDA), and leverage ratio of 6.7 times. It said the leverage ratio is close to 10 to 13 times EBITDA.
Gotham City also questioned the financial links between Grifols and Scranton Enterprise, an investment vehicle linked to the founding Grifols family.
Mirabaud Research said on Wednesday Gotham City’s report was “partial, shady and leads to conclusions whose only purpose is backing its short position”, but that it did highlight some accounting practices and ties with related parties which Grifols “should abandon for the good of its credibility”.
After falling 2% earlier in the day, Grifols shares reversed course and were up 0.8% in late morning trading on Wednesday after the company said it would sue Gotham City.
(Reporting by Joan Faus and Inti Landauro, editing by Andrei Khalip)
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