Benettons, ACS declare truce with $23 billion deal for Abertis

Wednesday , March 14, 2018 - 8:55 AM

Tommaso Ebhardt, Charles Penty, Esteban Duarte and Daniele Lepido

(c) 2018, Bloomberg.

An eight-month battle for control of Abertis Infraestructuras ended with rival Italian and Spanish suitors agreeing to buy the toll-road operator together for 18.22 billion euros ($22.5 billion).

Under the deal unveiled Wednesday, Madrid-based ACS will go ahead with a cash offer of 18.36 euros a share through its German arm. The Benetton family’s Atlantia will withdraw its competing and lower bid, and when the transaction is complete, gain control of Abertis, a Spanish operator of highways. The accord is subject to Atlantia getting approval from its board and financing, it said in a statement.

The arrangement averts a bidding war that was looming over Abertis and removes political resistance that cropped up in Spain as Rome-based Atlantia pursued the acquisition on its own. Abertis will remain Spanish, though its new Italian co-owners will have a stronger hand in management. A sale would require acceptance from Abertis shareholders.

Atlantia and Real Madrid Chairman Florentino Perez’s Actividades de Construccion y Servicios will create a co-owned holding company to control Abertis if their bid is accepted. Atlantia will have just over a 50 percent direct stake in the new entity, allowing the Italian company to consolidate the results of the Spanish prize, the statement said, confirming an earlier report by Bloomberg News.

The details of the multi-step agreement would also lead to ACS owning 30 percent of the holding company, which will be based in Madrid, while the rest will be held by its German business, Hochtief AG. Atlantia will buy Hochtief shares for as much as 2.5 billion euros, adding indirectly to its holding in Abertis. It will name the CEO and ACS will name the chairman, people familiar with the matter have said. Criteria Caixa, Abertis’s top shareholder, supports the offer, the people said.

The two sides reached a tentative agreement to team up soon after ACS’s counteroffer was approved by regulators, Bloomberg News reported on Monday. The deal doesn’t include a breakup plan for the Spanish company, signaling Atlantia Chief Executive Officer Giovanni Castellucci and ACS’s Perez, who have been circling each other for months, will have to cooperate to run Abertis. It also frees capital for Atlantia, which has just agreed to buy a 1.06 billion-euro stake in Eurotunnel, to seek more acquisitions to expand outside Italy.

Perez emerged in July at the helm of a Spanish counter-bid for Abertis as Mariano Rajoy’s government wasn’t willing to concede the country’s biggest toll road operator, which manages 8,650 kilometers of highways, including roads in France, Spain, Italy, Brazil and Chile, to its Italian rival.

The Spanish government was favoring a domestic buyer for Abertis, which was considered a strategic asset due to its infrastructure interests and satellite operating arm, Hispasat, people familiar with the matter said at the time. On Tuesday, Abertis agreed to sell its 57 percent stake in Hispasat for at least 656 million euros, conditional on it receiving a binding offer from Spanish power-network operator Red Electrica Corp.

Atlantia outlined its plan for Abertis in April, after Bloomberg News reported that the company was looking at its Spanish peer to create the world’s biggest toll-road operator. The Italian company made a formal 16.3 billion-euro offer in May and Castellucci sought to get Abertis’s top shareholder, Criteria Caixa, on board. The offer was topped in October by ACS’s Hochtief.

In an unexpected twist last week, ACS and Atlantia said they were in early talks on the bidding process. The discussions progressed over the weekend in Madrid.

Hochtief shares gained as much as 5.5 percent and were trading 4.8 percent higher at 153.70 euros as of 2:37 p.m. in Frankfurt. Atlantia was down 0.6 percent in Milan. After an earlier suspension, Abertis was little changed in Madrid while ACS surged as much as 8.4 percent and was up 7.5 percent to 32.94 euros.

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Bloomberg’s Thomas Gualtieri and Manuel Baigorri contributed.

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