Impregilo Bid Reflects Joint Company’s Value, Salini Chief Says

Salini SpA’s 4 euro-a-share offer for Impregilo SpA reflects the highest price the Italian construction group will command for a long time, Pietro Salini, chief executive officer of both companies, said in an interview.

Impregilo may be taken off the market and re-listed, possibly in London, if Salini succeeds with a bid that values the Milan-based company at 1.6 billion euros ($2.05 billion), the CEO said. Investors including the Gavio family, with a 30 percent stake, have until April 12 to accept or reject the offer.

“If Gavio offers me 4 euros a share, I will sell,” Salini said. “No one will lose one cent from where we came into the company until this offer.”

Salini, whose company holds about 30 percent of Impregilo, made the offer on March 18. Salini won control of the board in July and ousted directors backed by IGLI, an investment company controlled by Gavio.

The offer price accounts for an extraordinary dividend from last year’s sale of Impregilo’s stake in Brazilian motorway operator Ecorodovias. The share value will decline after the payout and a possible relisting would be at a lower price. A failed takeover would also diminish the value of the stock, Salini said.

Impregilo was unchanged at 4 euros in Milan trading. The stock was priced at 3.99 euros on March 18, the day before the offer was made public. Salini said he doesn’t intend to raise the price and “there is no plan B” if the bid fails, he said.

The company may be taken private temporarily if Salini gains control of as much as 90 percent of the shares. It may also be delisted if Gavio refuses to tender its shares as part of an effort to get the investor to exit.

Halfway There

Impregilo and Salini are already working like a combined company in most ways, leading to a “booming” order book and the company to bid for larger projects, the CEO said. A joint company would be the biggest in Europe for large civil engineering projects, he said. Impregilo builds tunnels and roads and is working on the expansion of the Panama Canal and the Copenhagen subway.

The CEO said it’s a challenge to first convince shareholders to back his strategic plan by supporting the board takeover and then persuade them to sell the shares.

A counteroffer from Gavio is “improbable but not impossible,” Salini said. “It still makes sense for them to exit.”