Abertis Shareholders, CVC Explore Investment, Bid for Company
July 5 (Bloomberg) — The two main shareholders of Abertis Infraestructuras SA are in talks with CVC Capital Partners Ltd. to explore how the manager of a 10.8 billion-euro ($13.5 billion) buyout fund could invest in Spain’s biggest highway operator.
One of the options under consideration would be the formation of a company comprising Criteria CaixaCorp SA, Actividades de Construccion y Servicios SA and CVC that would bid for the whole of Abertis, ACS and Criteria said in filings to regulators today. No decision has been made on whether to proceed, said Criteria, which owns 28.5 percent of Barcelona- based Abertis, and ACS, which has 25.8 percent.
“The described transaction is in the stage of analysis and may not come about, be structured in a different way or be on a different scale,” Criteria said in its statement.
Private equity firms, which have more than $500 billion of unspent money, are looking for acquisitions again after a two- year freeze because of the credit crisis. Shares in Abertis soared as much as 13 percent to 13.64 euros before being suspended by the market operator in Madrid, boosting the company’s market value to 10 billion euros.
Under the scenario in which a joint company bids for Abertis, it would acquire a “very substantial part” of shareholdings controlled by Criteria and ACS, with a view to bidding for the rest at the same price it paid for the stock, Criteria said in its filing.
‘Tremendous Hidden Value’
The Financial Times reported today that Abertis’s two main shareholders are considering a leveraged buyout with CVC that would value the company at more than 25 billion euros, including debt. In its statement, Criteria said the value for Abertis mentioned in the media was not an agreed amount. James Olley, a spokesman for CVC, declined to comment.
Abertis has expanded into television services, airport management and foreign highways as well as toll roads, which still accounted for about three-quarters of its 2009 revenue of 3.94 billion euros.
“Abertis is a company with a tremendous hidden value,” said Alberto Espelosin, who helps manage about $12 billion at Ibercaja Gestion in Zaragoza, Spain. The attraction for CVC may be that it could sell off Abertis-owned assets such as its 14.9 percent stake in Portugal’s Brisa-Auto Estradas de Portugal or 6.7 percent of Atlantia SpA, he said.
ACS may need to raise funds to help cut debt, said Olivia Peters, an analyst at MF Global in London. The company has a leverage ratio of seven times debt to earnings before interest, taxes, depreciation and amortization, based on 2010 estimates, she said.
Another option for ACS would be to raise funds, perhaps to boost its stake in power company Iberdrola SA, based in Bilbao, Spain, to 20 percent from the 12 percent it controls now, Peters said. The builder has been approached by funds and companies about Abertis and any decision to bring in a new investor would be taken with Criteria’s consent, ACS Chairman Florentino Perez said in April. ACS shares gained as much as 9.6 percent today.
Because no decision has been made on the transaction, it’s still impossible to say what will be the final stake of each investor in Abertis or whether ACS will pare back its own investment, ACS said. Criteria said that while in the event of a bid for Abertis, its stake in the company could at first shrink, its indirect holding may eventually be higher than what it is now, depending on the result of the process.
CVC’s recent deals in Spain include the acquisition of a 35 percent stake in cable network operator Operador R in May. The firm also led the takeover of clothing retailer Cortefiel in 2005 and purchased Mivisa Envases SAU, Spain’s largest maker of cans for food products, the same year. CVC bought Anheuser-Busch InBev NV’s east European breweries for 1.5 billion euros in October, then the biggest private equity transaction in Europe since the collapse of Lehman Brothers Holdings Inc.