Roadway Operator Makes Bid for Rival -- WSJ
Italian infrastructure group Atlantia SpA said Monday it has launched a cash-and-share offer for Abertis Infraestructuras SA, in a transaction valuing the Spanish company at EUR16.3 billion ($17.8 billion) that could create the world's biggest toll-road operator.
Atlantia's bid represents the second attempt to combine the two companies after they came close to creating a group more than 10 years ago that would have had a market capitalization of EUR25 billion.
The deal ultimately collapsed, with the companies citing blocks imposed by the Italian government and transportation regulator as a reason for scrapping the merger.
One of the reasons behind Italy's political opposition to the previous deal, according to a person familiar with the new transaction, was that Abertis was larger than its Italian rival.
The balance of power has now reversed: Atlantia has a market capitalization of EUR20.5 billion, while Abertis is valued at EUR16.2 billion.
However, the deal isn't guaranteed to close this time, either. Barcelona-based Abertis said in a statement Monday that the company's board wouldn't weigh in on the deal until it was legally required to do so. A spokeswoman said that time frame was in six months.
Abertis's single largest investor is Spain's Criteria Caixa SAU, which owns 22.3% of the infrastructure company.
A spokesman for Criteria Caixa said on Monday that the company would evaluate "without haste" what it called "the friendly offer."
A Spanish banking foundation owns 100% of Criteria Caixa, which in turn holds stakes in industrial investments and a majority stake in CaixaBank SA, one of Spain's largest lenders.
Atlantia said the deal would create the largest global toll-road operator, managing a road network of 14,095 kilometers (8,758 miles) in 19 countries. The new group would have earnings before interest, taxes, depreciation and amortization of EUR6.6 billion and EUR2.4 billion of investments.
"Should the offer be successful, the combined group will result in a very strong cash-flow generation capacity and ability to invest which, together with our unique geographic presence, will allow us to be the most suitable partner to address the needs of the relevant institutions and customers in our countries of operation," said Atlantia Chief Executive Giovanni Castellucci.
The Italian company said it would offer EUR16.50 for each share in Abertis. Alternatively, it said that shareholders in the Spanish company can receive stocks at a swap ratio of 0.697 Atlantia shares for each Abertis one.
On Monday, Abertis shares were down 0.7% to EUR16.34 in afternoon Madrid trading, while Atlantia shares were up 3.1% to EUR24.97 in Milan.
The deal, should it close, would diversify Atlantia's geographical footprint. While the Italian company is now larger than Abertis, Atlantia's assets are concentrated in its domestic market. For Abertis, the deal would extend the average lifespan of its toll-road concessions, which have fallen in recent years, analysts at Olivetree Financial said in a research report.
The combined company would generate most of its revenue through highway assets in France, Italy, Spain, Chile and Brazil and would likely continue with Abertis's recent strategy of selling noncore assets to become a pure-play motorway exposure, according to Olivetree Financial.
Credit Suisse and Mediobanca are acting as financial advisers to Atlantia.
Write to Giovanni Legorano at giovanni.legorano@wsj.com and Jeannette Neumann at jeannette.neumann@wsj.com
(END) Dow Jones Newswires
May 16, 2017 02:47 ET (06:47 GMT)