(Bloomberg) -- Brookfield Asset Management Ltd. walked away from a plan to acquire Grifols SA, ending months of negotiations to take over the Spanish blood-plasma company. 

The New York-based money manager said Wednesday it decided to not pursue the deal, confirming a Bloomberg report, after the Grifols board rejected its indicative offer that valued the company at €6.45 billion ($6.8 billion). Brookfield said in a regulatory filing that it was “not in a position to continue with a potential offer” after extensive due diligence and considering the board’s rejection.  

Brookfield, whose talks were disclosed publicly in July, was looking to take the company private in partnership with the Grifols family, which owns about a third of the maker of medicines for diseases such as as hepatitis and hemophilia. The Spanish company’s founding family said it won’t support any new bid to take its eponymous drug-maker private. 

“The family will not back another take private transaction,” a spokesperson for the Grifols clan said by phone, noting that it had received letters from existing shareholders saying the company was being undervalued. “We will continue working so that the company’s value increases even more.”

Grifols shares fell more than 13% in Madrid after the news was published by Bloomberg, the biggest intra-day decline since Feb. 29. Its bonds due in October 2028 recorded the steepest daily drop since January in early morning trading to around 89 cents.

Grifols has faced a rough year since New York-based short seller Gotham City Research LLC issued a report in early January questioning its governance and accounting. The company has lost over a third of its market value since then, as the allegations and management mishaps eroded investor confidence. 

“Brookfield was an opportunistic investor who was likely trying to take advantage of the delicate situation of the company and wanted to make a low offer for it,” Bestinver Securities analyst Patricia Cifuentes said in a note to clients. Brookfield is likely walking away over disagreements on valuation rather than any irregularities in the company’s books, she said.

A spokesperson for Grifols declined to comment.

For decades, Grifols rode the demand for blood plasma. But after a chaotic period during the pandemic, blood collection dwindled and the massive debt load from the company’s acquisition binge came into sharp focus. At the end of the third quarter, the company’s debt — including leases — stood at €9.2 billion.

Although Grifols’ leverage has gradually improved, questions remain about the company’s ability to generate cash, especially after it issued an unexpectedly low guidance of €5 million in free cash flow for 2024, citing extraordinary items and surprising analysts.

Short seller Gotham accused Grifols in its report of shuffling assets with a family holding company and manipulating debt and profit numbers. 

Grifols has rejected the accusations and sued the short seller in a New York court. Meanwhile, Spain’s National Court said on Nov. 19 that it would investigate Gotham for allegedly releasing “biased and deceptive” information about the firm to influence investors into selling the stock.

In the aftermath of the short seller report, the company introduced management changes, appointing a new chief executive officer, Nacho Abia, and a new chief financial officer, Rahul Srinivasan, Bank of America’s former head of leveraged finance and capital markets for EMEA. In September, Grifols accelerated a plan to cut Chairman Thomas Glanzmann’s executive powers to mark a clear separation between the board and daily management.

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