Hyperas stock fell over 7% shortly after the market opened on October 24, reacting to the companys rejection of a merger proposal from EMS.The pharmaceutical companys shares ranked among the largest losers on the Ibovespa index.
This decline followed Hyperas announcement that it had rejected an unsolicited merger offer from EMS.In a market statement, Hypera clarified that the proposal was neither solicited nor previously discussed during a board meeting on October 23.The company emphasized that no negotiations had taken place regarding the potential merger.
Hypera noted significant differences in organizational culture and governance practices between itself and EMS.In addition, Hypera has been publicly traded since 2008, with substantial shareholder dispersion, while EMS operates as a family-owned private entity.Hypera Rejects Merger with EMS, Shares Plunge Over 7% on B3.
(Photo Internet reproduction)The company also stated that EMSs valuation in its offer significantly underestimated Hyperas worth.
The idea of merging Hypera and EMS gained attention earlier this week.Market Reactions and Future ImplicationsOn October 21, NF Farma, which controls EMS, proposed a public acquisition offer for up to 20% of Hyperas shares at R$30 ($5.36) each, with the remainder exchanged for shares.
If successful, this deal would allow EMS to control at least 60% of Hypera.Initially, Hyperas shares dropped over 17% after announcing it would not provide financial projections for 2024.
However, following news of the potential merger, shares rebounded slightly and ended the day up by more than 2%.Market analysts viewed this possible merger favorably, believing it could create significant synergies.
Ita BBA projected a price-to-earnings ratio of 10.5x by 2026 for the merged entity.However, Bradesco BBI anticipated this rejection due to the lack of a control premium and an offer price nearly 40% below Hyperas peak stock price in 2022.
Just before the announcement suspended trading in Hyperas shares, its stock fell approximately 2.3%.