The Basque steel group Sidenor has threatened to abandon the purchase of 29.9% of Talgo held by the Trilantic fund, an operation that “is not life or death” for the company chaired by José Antonio Jainaga. Sidenor sources have explained that the entry into Talgo “It is not a matter of life or death. If the current shareholders do not want us in Talgo, we will withdraw so as not to waste time and energy unnecessarily.”
The Sidenor offer
Sidenor offers to buy 29.9% of Talgo, currently held by Trilantic, at a price of 4 euros per share, which would mean valuing that participation at 150 million euros and the company’s total at around 500 million.
It is an amount substantially lower than the 5 euros per share (185 million for 29.9% and 620 million for 100%) offered by the Hungarian Ganz Mavag (Magyar Vagon), which In March it launched a takeover bid for the entire capital, finally vetoed in August by the Spanish Government for reasons of national security. However, the offer is above the 3.52 euros at which Talgo shares closed on the stock market this past Friday.
Documentation analysis
Sidenor executives had access to information about Talgo just a week ago, and are now in the process of analyzing that documentation (‘due diligence’) after the confidentiality agreement was signed almost two months ago, on the 16th. of October.
Talgo is a strategic company for the country, although it requires a considerable investment and industrial structuring effort, say the same sources, who add: “we are convinced that in good hands it can have a bright future.”
Trilantic has its participation syndicated with the Abelló family company (Torreal) and with a participation of the Oriols, the founding family of Talgo, in a vehicle, Pegaso, which together controls 40%.
This shareholder agreement expires at the end of the year and would leave Trilantic’s hands free to undo his position alone. Other sources close to the negotiation criticize that the railway builder’s shareholders have delayed access to information for almost two months and that Talgo’s senior management does not facilitate the operation.
They also focus on the fact that one of Trilantic’s top executives, Javier Bañón, is “desperately” looking for other offers to put pressure on the price that Sidenor offers.
At the same time, Trilantic would be trying to get the Government to “soften” the conditions of the Renfe fine, which has sanctioned Talgo with 116 million euros for delays in the delivery of Avril trains, because you understand that it will have a negative effect on the price of the transaction.
Both the central government and the Basque Executive have expressed their support for this operation. The first highlights that it can be a solvent solution and give stability to Talgo and the second supports the entry of Sidenor if its roots in Euskadi are maintained and employment is promoted.
Poland has already made an offer
Other sources close to the companies confirmed to EFE that Polski Fundusz Rozwoju could enter the operation (PFR)the Polish Development Fund (a kind of SEPI), public, which also controls the country’s company Pesa.
That company produces locomotives, regional trains and trams, although not high-speed material, so they understand that their businesses are complementary.
As Business Insider Polska published this week, the PFR has already made a specific offer to Talgo shareholders and has already obtained financing for its possible acquisition.
Pesa, according to the sources consulted by EFE in the sector, does have the industrial capacity to reinforce the positions of Talgo, whose order book is greater than 4,000 million, but which lacks “industrial muscle.”
On September 24, Talgo and Pesa signed a memorandum of understanding to study the possibility of collaborating in the development of the new railway network high and very high speed trains in Poland. This document contemplates the bidding process for the purchase of very high-speed rolling stock for that country, which will begin in 2025.
Pesa is also interested in Rail Baltica (the high-speed interconnection of the three Baltic capitals, Vilnius, Riga and Tallinn, supported by the European Commission), a project in which the Spanish companies Ineco participate, in the engineering design, and Renfe as a “shadow operator” (a kind of operations advisor).
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