On 14 March 2018 ACS (Actividades de Construcción y Servicios), its subsidiary Hochtief and Italy’s Atlantia agreed to share Abertis: Hochtief keeps its offer, now in cash only, and a joint company will be set up.
On 14 March 2018 Hochtief, its parent ACS and Italy’s Atlantia told the National Securities Market Commission (CNMV) of an agreement in principle, binding but subject to conditions, to act jointly on Abertis, the motorway concessionaire with roots in Barcelona whose registered office moved to Madrid in October 2017. The deal ends the competition between two takeover bids for the same company: Atlantia’s, authorised by the CNMV on 9 October 2017, and Hochtief’s, authorised on 12 March 2018. The CNMV lifted the suspension of trading in Abertis at 14:00.
The terms
Hochtief is changing its offer to remove the part paid in shares: it offers €18.36 per Abertis share, entirely in cash and adjusted for any gross dividends paid. That figure is the earlier price, €18.76, minus the €0.40 per share dividend that Abertis was due to pay on 20 March. According to the CNMV register, the offer covers 100% of the capital and its theoretical value is about €18,183 million. Atlantia is withdrawing its own, of €16.50 per share.
The shares will be bought by a special-purpose company with about €7,000 million of capital, which will acquire from Hochtief all the Abertis shares it obtains, at the same price Hochtief pays in the offer; the rest will be financed with new bank debt. Atlantia will hold 50% plus one share of that company, ACS 30% and Hochtief 20% minus one share. With that minimal majority Atlantia will consolidate Abertis and its debt in its accounts, and a shareholders’ agreement will set the reserved matters.
The agreement also touches Hochtief: ACS will subscribe a capital increase of about €941 million and will sell Atlantia Hochtief shares worth up to €2,500 million, at €146.42 each. ACS will keep more than 50% of Hochtief. The three companies also plan to cooperate over the long term on new public-private partnership projects.
What happens to shareholders
Anyone holding Abertis shares will be able to accept the offer once the acceptance period opens; first, the CNMV must authorise the supplement that amends the prospectus. According to its register, the planned acceptance period ran from 20 March to 18 April. If the legal thresholds are reached, Hochtief will force the remaining shareholders to sell; if not, it will request the delisting of Abertis. The €0.40 per share dividend is paid separately, on 20 March.
According to the business press, Criteria CaixaHolding, which held more than a fifth of Abertis, took no part in the negotiations and its position was not known on the day of the announcement. The agreed price is 11% higher than Atlantia’s offer of €16.50.
What to review
Anyone who holds Abertis shares, directly or through funds or pension plans, can review how much exposure they have, what conditions the prospectus sets and how a sale would be taxed, since it may produce a capital gain subject to personal income tax (IRPF). Ask your tax adviser how it applies to your case.
For business owners, the case shows how control of a strategic company is divided among several partners: with 50% plus one share of the joint company, Atlantia consolidates Abertis, and a shareholders’ agreement decides on which matters everyone has to agree. Before joining a company like that it is worth reading that agreement as carefully as the price.
In a contested bid, the price rises while the rivals compete; once they agree, what remains for the shareholder is whether to accept.
This article is general information. It is not legal, tax or investment advice, and it does not take anyone’s particular circumstances into account.
