Roadway Operator Makes Bid for Rival -- WSJ
16 May 2017 - 5:02PM
Dow Jones News
By Giovanni Legorano in Rome and Jeannette Neumann in Madrid
Italian infrastructure group Atlantia SpA said Monday it has
launched a cash-and-share offer for Abertis Infraestructuras SA, in
a transaction valuing the Spanish company at EUR16.3 billion ($17.8
billion) that could create the world's biggest toll-road
operator.
Atlantia's bid represents the second attempt to combine the two
companies after they came close to creating a group more than 10
years ago that would have had a market capitalization of EUR25
billion.
The deal ultimately collapsed, with the companies citing blocks
imposed by the Italian government and transportation regulator as a
reason for scrapping the merger.
One of the reasons behind Italy's political opposition to the
previous deal, according to a person familiar with the new
transaction, was that Abertis was larger than its Italian
rival.
The balance of power has now reversed: Atlantia has a market
capitalization of EUR20.5 billion, while Abertis is valued at
EUR16.2 billion.
However, the deal isn't guaranteed to close this time, either.
Barcelona-based Abertis said in a statement Monday that the
company's board wouldn't weigh in on the deal until it was legally
required to do so. A spokeswoman said that time frame was in six
months.
Abertis's single largest investor is Spain's Criteria Caixa SAU,
which owns 22.3% of the infrastructure company.
A spokesman for Criteria Caixa said on Monday that the company
would evaluate "without haste" what it called "the friendly
offer."
A Spanish banking foundation owns 100% of Criteria Caixa, which
in turn holds stakes in industrial investments and a majority stake
in CaixaBank SA, one of Spain's largest lenders.
Atlantia said the deal would create the largest global toll-road
operator, managing a road network of 14,095 kilometers (8,758
miles) in 19 countries. The new group would have earnings before
interest, taxes, depreciation and amortization of EUR6.6 billion
and EUR2.4 billion of investments.
"Should the offer be successful, the combined group will result
in a very strong cash-flow generation capacity and ability to
invest which, together with our unique geographic presence, will
allow us to be the most suitable partner to address the needs of
the relevant institutions and customers in our countries of
operation," said Atlantia Chief Executive Giovanni Castellucci.
The Italian company said it would offer EUR16.50 for each share
in Abertis. Alternatively, it said that shareholders in the Spanish
company can receive stocks at a swap ratio of 0.697 Atlantia shares
for each Abertis one.
On Monday, Abertis shares were down 0.7% to EUR16.34 in
afternoon Madrid trading, while Atlantia shares were up 3.1% to
EUR24.97 in Milan.
The deal, should it close, would diversify Atlantia's
geographical footprint. While the Italian company is now larger
than Abertis, Atlantia's assets are concentrated in its domestic
market. For Abertis, the deal would extend the average lifespan of
its toll-road concessions, which have fallen in recent years,
analysts at Olivetree Financial said in a research report.
The combined company would generate most of its revenue through
highway assets in France, Italy, Spain, Chile and Brazil and would
likely continue with Abertis's recent strategy of selling noncore
assets to become a pure-play motorway exposure, according to
Olivetree Financial.
Credit Suisse and Mediobanca are acting as financial advisers to
Atlantia.
Write to Giovanni Legorano at giovanni.legorano@wsj.com and
Jeannette Neumann at jeannette.neumann@wsj.com
(END) Dow Jones Newswires
May 16, 2017 02:47 ET (06:47 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
Atlantia (BIT:ATL)
Historical Stock Chart
From Apr 2024 to May 2024
Atlantia (BIT:ATL)
Historical Stock Chart
From May 2023 to May 2024