Slim's Carso Offers 15% Premium to Buy Rest of Spain's FCC

  • Already the biggest shareholder, Slim has invested since 2014
  • Carso bid 7.6 euros a share after crossing 30% stake threshold

Billionaire Carlos Slim made a bid for Fomento de Construcciones & Contratas SA, culminating a series of investments that began in 2014 to shore up one of Spain’s biggest builders.

Slim’s Inversora Carso offered 7.6 euros a share after crossing a 30 percent threshold that triggered a bid for the whole company. The price is a 15 percent premium to FCC’s stock at the close in Madrid Friday and values the company at 2.88 billion euros ($3.17 billion).

Slim, already FCC’s largest shareholder, controls about 36.6 percent of the company directly and indirectly, Carso said in a filing today. FCC is the third-biggest builder in Spain and its biggest cement producer. It’s also the world’s sixth-biggest water management company and among the top five providers of waste disposal in the U.K. In a separate move, Carso requested FCC study a bid for its Cementos Portland Valderrivas SA unit at 6 euros a share.

“Slim is really creating a conglomerate in construction, cement and environmental services,” said Ricardo Wehrhahn, managing partner at Intral Strategy Execution, a banking and business consulting firm in Madrid. “There are a lot of synergies to be had if you build the scale.”

Slim, the world’s fourth-richest man, and FCC shareholder Esther Koplowitz agreed last month to remove a clause limiting their maximum stakes in the company to 29.99 percent. In 2014, Slim became FCC’s biggest shareholder in a capital increase that the company used at the time to cut its debt. Microsoft Corp. co-founder Bill Gates owns 5.7 percent of FCC, according to the website of Spain’s market regulator CNMV.

Slim “is very confident in Spain as a country and is very optimistic about the economy picking up there in a significant way,” spokesman Arturo Elias Ayub said in a phone interview. “Water and waste management are important businesses inside FCC that have great growth potential, not just in Spain, but across the world.”
A spokesman for FCC declined to comment.

FCC, which traces its roots to 1900 when a precursor firm won a contract to build new wharves at Barcelona port, narrowed its loss in 2015 to 46.3 million euros from 724.3 million euros a year earlier, boosted by 9.8 percent revenue growth from international markets, the company said Feb. 29. Environmental and water-management businesses accounted for 80 percent of the group’s profit last year before interest, taxes, depreciation and amortization.

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