Bill Gates Buys Stake in Spain’s FCC as Economy Recovers
Gates, the world’s richest man according to the Bloomberg Billionaires Index, paid 113.5 million euros ($155 million) for a 5.7 percent holding, the Barcelona-based company said in a statement yesterday. FCC gained as much as 13 percent in Madrid trading to the highest price in more than 18 months.
Spanish assets such as FCC, a construction company with water and waste-management operations, are luring investors as the country’s economy exited a two-year recession in the third quarter, according to government estimates. Spain’s extra borrowing costs compared with Germany’s have more than halved from their peak. As foreign investors return to Spain’s bond and equity markets, the main Ibex-35 share index has risen 23 percent this year.
“The positive structural changes in Spain are far more evident than in other countries such as Portugal or Greece,” Francisco Salvador, a Madrid-based analyst at FGA/MG Valores, said by phone. “If Spain were a company, it would be a restructuring story similar to that of FCC, and investors usually like those stories.”
FCC said today that another institutional investor bought 0.26 percent.
The stock gained as much as 2.08 euros to 17.75 euros and ended trading in Madrid up 8.3 percent, valuing it at 2.2 billion euros. Before today, the stock had gained 67 percent this year.
Gates, the 57-year-old co-founder of Redmond, Washington-based Microsoft, recaptured the title of the world’s richest person in May from Mexican investor Carlos Slim, as the software maker hit a five-year high. His fortune is valued at about $75 billion.
Gates still owns a stake in Microsoft and his portfolio also includes Ecolab Inc., a St. Paul, Minnesota-based provider of sanitation and health services, as well as Phoenix-based waste disposal company Republic Services Inc. and Montreal-based Canadian National Railway.
To reduce debt, FCC has been shedding several assets. The company in June agreed to sell its stake in the water and waste-management company Proactiva Medio Ambiente to Veolia Environnement SA. In July, is said it will sell 49 percent of its Czech water unit SmVak to Mitsui Co.
The Spanish government says the economy is now growing after shrinking for nine quarters in a row. As a result, investors are looking for ways to profit from a Spanish property crash that left the banking industry with more than 180 billion euros of soured loans linked to real estate and lenders with the task of managing property on their books.
Spain’s La Caixa financial group in September agreed to sell a 51 percent stake in its real-estate servicing company to private-equity firm TPG.
Also last month, Apollo Global Management LLC (APO) agreed to buy Evo Banco, a unit of nationalized Spanish lender NCG Banco SA. The deal marked the first foreign private-equity acquisition of a Spanish bank since the nation agreed to a 100 billion-euro European bailout for its financial system and created a bad bank to remove soured real estate assets from lenders’ books.
Even with a growing economy, Spain’s property market slump is still deep. House sales fell 15 percent in August from a year earlier and home-mortgage approvals fell an annual 43 percent in July, according to Spain’s National Statistics Institute.