Abertis May Attract Spanish Suitor After $19 Billion Italian Bid

Updated on
  • Deal would rekindle ties with tollroad asset ACS helped found
  • Advisers working with the builder to evaluate counter offer

ACS is considering a counter bid for Abertis Infraestructuras SA to rival a 16.3-billion-euro ($19 billion) approach from the Benetton family’s Atlantia SpA and keep the Barcelona-based toll-road operator in Spanish hands.

ACS Actividades de Construccion y Servicios SA, as the builder is officially called, is working with a team of external advisers to study a potential offer, it said in a filing Friday, confirming an earlier report in Expansion newspaper. ACS’s board hasn’t yet considered the matter, the Madrid-based company said. A spokesman for Abertis declined to comment.

At stake is a manager of more than 5,000 miles of highways, including roads in France, Spain, Italy, Brazil and Chile that ACS had a hand in founding just over a decade ago. The builder’s high debt-load led to the 2012 sale of its stake in Abertis, which offers more stable revenue flows than the cyclical construction industry. A takeover by a Spanish company may also soothe any concerns within government about Abertis being foreign-owned.

Please click here for Gadfly’s analysis of a possible ACS bid.

While Abertis’s board of directors has refrained from commenting on the Atlantia bid until legally required to do so, its top shareholder, Criteria Caixa SA, sees the approach by the Italian company as a friendly one. Still, Abertis comes with a satellite operating arm, Hispasat, that may be viewed as a strategic asset on security grounds. The government already ruled out a counter bid from state-controlled airport operator Aena.

ACS Shares Fall

While welcome news for Spain’s government, ACS’s interest in toll roads did little to soothe its investor concerns. It was ACS’s sell down of its Abertis stake that helped it rein in its leverage, yet its market worth is still below Atlantia’s bid for Abertis. ACS declined 5.2 percent to 33.01 euros as of 1:41 p.m., giving the company a market value of 10.4 billion euros.

“It is difficult to understand the rationale behind such a deal,” Joaquin Ferrer, an analyst at Kepler Cheuvreux, said in emailed comments. “The nature of ACS’s business is contracting, not infrastructure asset management. The only angle that we see is that ACS acted as the Spanish face for a group of international financial investors. We don’t think the Spanish government is necessarily happy about Atlantia taking control of Abertis.”

Atlantia declined 1.8 percent to 25.34 euros. Abertis rose 1.4 percent to 16.73 euros. The bid, announced in May, values Abertis at 16.50 euros a share in cash.

ACS Chairman Florentino Perez has been looking to increase the company’s exposure away from Spain by developing a larger presence in other parts of Europe, the U.S. and Australia. Perez, who is also chairman of the Real Madrid soccer team, recently ceded the role of chief executive officer to Marcelino Fernandez, the head of the company’s German subsidiary, Hochtief Solutions AG. ACS has grown through contracts to develop state infrastructure, and has always had strong ties to Spanish governments.

— With assistance by Macarena Munoz Montijano, Maria Tadeo, and Tommaso Ebhardt

(Updates to add share price in fifth paragraph.)
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