The British background TrilanticTalgo’s largest shareholder, already has the offer of Sidenor to buy up to 29.9% of its participation in the train manufacturer. The amount offered would be around 150 million of euros, the equivalent of about 4.05 euros per title. But the offer is not convincing to the investment firm led by the Spaniard Javier Bañón, which continues to refer to the five euros offered by the Hungarian consortium Ganz-MaVag to give up control of the company based in Madrid.
According to sources close to the operation, the investment fund has already received the proposal from the Basque steel group chaired by José Antonio Jainaga, but has chosen to decline it immediately after knowing the price offered for each title, a movement similar to the almost instantaneous rejection that he sent to Skoda after his merger proposal. There would be two reasons that justify it: the indicated low amount, inviting the Bilbao businessman to raise his bid; and the obligation to comply with the right of tow that it established with its partners to formalize its IPO.
The Hungarian offer valued the manufacturer at 619.2 million euros; while the Basque company’s proposal would reduce this value to 501.6 millionaccording to information provided by the Basque newspaper The Mail. If José Antonio Jainaga, the businessman behind Sidenor, raises his bet to 5 euros, his offer would grow to 185.5 million for the same percentage of the capital. But if we add to that the part corresponding to the other partners, the Abelló and Oriol families, the figure rises to 248.5 million for 40.2% of the capital jointly controlled by these partners during the last decade.
17% premium
Sidenor’s proposal is, in any case, a value higher than that given by the market to the railway industry, whose securities opened the day on Monday at 3.38 euros per share and closed at 3.47 euros, after accumulating an increase 3.27% due to purchase rumors. The 4.05 euros that the Basque businessman José Antonio Jainaga has put on the table would represent a 16.7% premium on the value at which Talgo was trading when the company communicated its offer to the CNMV, 3.47 euros at the close of October 15. The premium would be 19.8% if the closing price last Friday is taken into account, before it was revealed that Trilantic already has the offer in its hand.
The British fund, with approximately 30% of Talgo’s capital, is its largest shareholder and has the leading voice in Pegaso Transportationthe vehicle under which it articulates its participation with its partners. This instrumental company controls 40.2% of the manufacturer’s capital, a figure higher than the 30% established by the Takeover Law as a limit to carry out a change of majority shareholder without launching a public acquisition offer to the market, precisely what the Hungarian company Magyar Vagon did, finally vetoed by the Government.
Everyone wants to sell
Trilantic, the Abelló and the Oriol sealed years ago a shareholders agreement to execute the company’s IPO, which included a carryover clause so that all of them could exit the capital at the same time and sell their shares at the same amount. The Abelló family, with almost 3% through their family office Torreal has shown his willingness to sell; as do the members of the Oriol family, who control 7% through multiple minority stakes held by each of the heirs of the company’s co-founder.
The British Bañón Fund also carries years trying to undo his position considering that his time at the head of the company has ended, but for years he has not found a seller to whom to place his high stake, now poisoned by the conditions that they imposed on themselves. The rest of the shareholders’ agreement is considered already fulfilledsince among the conditions set then was exceeding the second anniversary from the date of admission to trading of the company, a milestone expired at the end of 2019.
Despite Trilantic’s attempts to involve other actors such as the Polish Government and its state-owned company Pesa, which at the moment still has not formalized any offerthe only formal proposal that is on the table of Talgo’s management is that of José Antonio Jainaga and his company Sidenor, confirmed to the market on October 16.
His plan is also preferred option of Moncloa and the Basque Government to dispose of the investment fund and ensure that the company continues its activity. Both have applied as financial partners to facilitate the taking of that 40.2%, for which they have opened the door for the SEPI and the support fund for Basque industry Finkatuz contribute funds in exchange for becoming minority partners.
The Vital Foundationa Kutxabank shareholder, has also shown interest in acquiring a minority interest. In any case, the entire operation is pending approval by the CNMV, which could understand that this is a concerted takeover. Alantra has carried out the financial and risk analysis of Talgo at the request of Sidenor.
Castilla y León offered land to Talgo in Miranda
The Junta de Castilla y León offered the Spanish manufacturer the possibility of settling on a large plot of land located in the industrial estate of Ircio, a district of Miranda de Ebroa town on the border with the province of Álava and which would be very close to its current Rivabellosa plant, where 700 people work, according to the Burgos newspaper.
The Mañueco Government thus tried to capture the railway industry, given its need for more space to manufacture and the requirement to increase its production rate to meet its order book, which would be linked to the arrival of personnel. Talgo confirms the negotiations, but explains that “there are no open negotiations” at this time.
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