Atlantia Offers $18 Billion for Abertis to Form Toll-Road GiantBy
Deal would create the world’s biggest toll-road operator
Atlantia made offer with backing of biggest investor Caixa
The Benetton family’s Atlantia SpA is bidding to buy Abertis Infraestructuras SA in a 16.3 billion-euro ($18 billion) offer that would create the world’s biggest operator of toll roads, without the formal backing of its top investor, Criteria Caixa SA.
The Italian infrastructure company is offering 16.5 euros per share for 100 percent of Abertis, according to an Atlantia statement on Monday. The offer price is 0.3 percent higher than Abertis’s closing price in Madrid on Friday and 8 percent more than the price on April 18, when Bloomberg News first reported Atlantia was exploring a combination.
The purchase of Abertis would be the largest foreign acquisition by an Italian company since utility Enel SpA bought Spain’s Endesa SA in 2007. The combination would manage more than 14,000 kilometers (8,700 miles) of highways from Rome to Santiago and have annual revenue of more than 10 billion euros, outpacing French rival Vinci SA, which had 2016 sales from highway concessions of about 6.3 billion euros.
“Over the past weeks we have worked to design an offer that is friendly and attractive for all shareholders, stakeholders and the management of both companies,” Giovanni Castellucci, Atlantia’s chief executive officer, said in the statement. “We believe we have achieved this goal.”
Atlantia, the owner of Italy’s biggest toll-road manager and Rome’s two airports, is seeking to boost earnings by acquiring assets outside Italy as part of Castellucci’s strategy to reduce dependence on its home market.
The Abertis bid comes without an agreement from its top investor nor from the Spanish company’s board of directors. The Italian company had "deep" and "continous" talks with Caixa, which holds 22.3 percent of Abertis’s stock, Castellucci said in a call with investors. He said the offer is "right" and it’s not a "test price," when asked if Atlantia could sweeten the bid to get Caixa’s approval.
As an alternative to the cash bid, Atlantia is offering 0.697 shares of the Italian company for each Abertis share. Abertis was trading at 16.32 euros at 2:47 p.m., below the bid price of 16.50 euros. Atlantia rose as much as 3.5 percent to 25.05 euros in Milan, its highest since Dec. 1, 2015, valuing the company at 20.6 billion euros.
Castellucci said the structure of the bid is designed to attract Abertis "long term investors" who have an interest in the governance of the company and for them to accept stock as an alternative to cash. This would allow them to get three seats on the Atlantia board. Abertis is valued at about 17.3 euros a share in the stock deal at today’s prices, with about a 5 percent premium over the cash offer.
Abertis’s board won’t comment on Atlantia’s bid "until legally required," the Spanish company said in a statement.
Atlantia’s eventual acquisition of Abertis may lead to an earnings per share accretion of about 30 percent, Francesco Sala, an analyst at Banca Akros, said in a note to clients. The bank is changing its recommendation on the stock to accumulate, he said.
The Italian company expects to complete the deal by the end of this year. If it wins control, Atlantia said it wants to sell a stake of slightly above 4 percent in Cellnex Telecom SA, a wireless tower business controlled by Abertis with a 34 percent holding. That would avoid Atlantia being forced to bid for all of Cellnex. Spanish law requires Abertis’s would-be buyer to also make an offer for any company in which Abertis holds a 30 percent or greater stake.
Atlantia, which leads a partnership that agreed in June to buy 60 percent of France’s third-biggest airport, Nice-Cote d’Azur, sold a 10 percent holding of its Autostrade per l’Italia SpA unit last month for 1.5 billion euros to help fund its acquisitions abroad.
The Rome-based company said it doesn’t plan to remove Abertis shares from trading if the deal is completed. The offer, which has a minimum acceptance rate of 50% plus one share, aims to create a world leader in the transport infrastructure business. Atlantia said it’s willing to pay up to 23.2 percent of Abertis in stock.
A pool of banks is providing financing for the deal, Atlantia said, though it didn’t disclose the amount or names of the lenders. Atlantia is raising about 11 billion euros in financing from a group of banks to help fund the cash portion of its offer, people familiar with the matter said earlier this month.
A decade ago, Abertis attempted to acquire Autostrade, but the deal collapsed because of Italian government opposition. Abertis sold its stake in the Italian operator in 2011.
Atlantia’s acquisition of Abertis bucks a trend of Italian companies being taken over by foreign firms. Recent deals have included the Pesenti family’s sale of Italy’s biggest cement maker, Italcementi SpA, and the De Longhi family’s sale of Delclima SpA to Japan’s Mitsubishi Electric Corp. Former Prime Minister Silvio Berlusconi last month completed the sale of soccer club AC Milan to a group of Chinese investors.
The billionaire Benettons have been restructuring the family’s holdings as their namesake clothing retailer struggled to compete with competitors such as Inditex SA’s Zara brand. In 2015, the family sold their stake in World Duty Free SpA to Dufry AG. The family hired former Telecom Italia SpA Chief Executive Officer Marco Patuano last year to revamp their businesses.
— With assistance by Daniele Lepido, Rodrigo Orihuela, Maria Ermakova, and Francesca Cinelli