The Hungarian group Magyar Vagon challenges the Government and presents the takeover bid for Talgo with the laborious core of shareholders in favor | Companies | EUROtoday

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The Talgo logo in front of the Madrid Stock Exchange Palace.
The Talgo emblem in entrance of the Madrid Stock Exchange Palace.Pablo Monge

The Hungarian consortium Ganz-Mavag has taken the step of presenting its long-awaited takeover bid (takeover bid) for the practice producer Talgo earlier than the National Stock Market Commission (CNMV). The buy try is for 100% (123.8 million shares) and to this point it has created nothing however suspicion within the Government. In the setting of President Pedro Sánchez, potential hyperlinks are being analyzed between the person who leads the takeover bid, the businessman András Tombor, with the Hungarian Prime Minister Víktor Orban, to whom he was nationwide safety advisor throughout his first time period, and even with the Russian chief Vladimir Putin. The Minister of Transport, Óscar Puente, acknowledged yesterday earlier than a bunch of journalists that the Executive will do “everything possible” to stop Magyar Vagon, the corporate behind the operation, from taking management of Talgo.

The sturdy level of the takeover bid, at 5 euros per share, is having the approval of the members within the Pegaso instrumental firm, holder of 40% of Talgo's capital and keen to promote, as defined within the doc printed within the CNMV portal. Talgo's board of administrators describes the takeover bid as pleasant and calls the consideration “attractive.” In reality, the Spanish firm “will provide the offeror with all the assistance that it reasonably requires for the successful completion of the offer, particularly with regard to the preparation and processing of the authorizations and consents necessary for its effectiveness.”

Ganz-Mavag acknowledges that the success of his offensive is determined by the approval of the Council of Ministers and the European Commission, within the latter case for a matter of protection of competitors. The buying social gathering tries to allay fears and affirms that its intention is for Talgo to proceed buying and selling in Spain, along with sustaining its headquarters and actions right here.

Government sources clarify that “all the details of the Talgo operation will be analyzed.” The argument is that it acts in a strategic sector “that plays a fundamental role in rail mobility, and we will always defend strategic industrial projects and jobs.” The identical sources recall that Spain has “a framework reinforced last year for the analysis and control of investments, guaranteeing that operations do not affect Spain's interests in matters of health, security and public order, and that it seeks to maintain balance to remain attractive as an investment destination.” With the Hungarian project already on the table, the Executive says it is working “to guarantee the future stability of Talgo. And that means being vigilant in the face of this operation.”

The Foreign Investment Board is the inter-ministerial body, attached to the Secretary of State for Commerce, that analyzes the implications of investments from abroad, such as this takeover bid for Talgo. This entity is chaired by Alicia Varela Donoso, general director of International Trade and Investments.

The offer values ​​the iconic train manufacturer, specialized in the high-speed segment, at 619 million euros and is subject to acceptance by 50% of the capital. The movement takes firmness, after weeks of negotiation between the purchasing party and Talgo's creditors: 18 banks have the capacity to demand early repayment of loans for 227 million if there is a change of control. Once the ground on which Magyar Vagon and its traveling companion, the Hungarian sovereign fund Corvinus, are standing (they share 55% and 45% of the consortium launching the takeover bid, respectively), the progress of the operation now depends on the approval of the CNMV to the prospectus, and that the Government does not stop the entry of foreign capital into Talgo.

“The offeror will begin the process of requesting authorization from the competent authorities as soon as possible after the publication of this announcement. [por el enviado esta tarde a la CNMV] and in collaboration with said authorities [en referencia al Gobierno español]”, can be read in the document that makes the launch of the takeover official. The Council of Ministers could have veto power under the anti-takeover shield from abroad, regulated through royal decree 571/2023, of July 4, on foreign investments. This shield was activated in the early days of the pandemic, and later expanded, due to the loss of value of important listed companies, with which the Executive can close the entry door by taking 10% of the capital. But it also protects unlisted companies in operations exceeding 500 million.

The company intended by Magyar Vagon has 82 years of history and factories in Las Matas (Madrid) and Rivabellosa (Álava). Its market capitalization is 553 million and it earned 12.2 million at the end of 2023. The price rose again this Thursday, rising 5.28%, to 4.39 euros. Thus, the takeover still offers a premium of 13.9% with its 5 euros. The offeror highlights the 14.4% premium over the 4.37 euros that Talgo's share was trading on February 7, when trading was suspended due to press reports that spoke of the preparation of the offer; a premium of 27.7% compared to the value on November 15, 2023, the day before Talgo revealed the potential interest of an investor; and reaches 35.7% over the average price of 3.68 euros corresponding to the month prior to November 15.

Talgo's board of directors will wait to see the offer prospectus “to analyze it in detail based on four basic and essential issues: preserving employment and industrial capacity in Spain; maintain the headquarters and management of Talgo in Spain; retain ownership of Patentes Talgo, SLU over the intellectual property rights and patents, and achieve the best option for all shareholders and other interest groups.”

Lack of quantity

The small measurement of Talgo to compete for practice orders from references such because the French Alstom, the Swiss Stadler, the Chinese CRRC or the Spanish CAF, requires an industrial increase for an organization that, along with rising at excessive velocity, desires to develop within the gentle rolling inventory enterprise. All in all, Talgo has orders in its portfolio for 4.2 billion, of which 2.1 billion have been contracted final yr.

Added to the necessity to achieve manufacturing capability is the will for the exit of one of many shareholders with a monetary profile, the Trilantic fund. Main member of the Pegaso instrumental firm, proprietor of 40% of Talgo, the sale of shares by Trilantic drags its different two companions: the founding household Oriol and Torreal, Juan Abelló's funding car. This core of shareholders have already expressed to the Talgo board their intention to just accept the takeover bid with all their shares. Other buyers are the Torrente Blasco household, with 5.03% by way of the Torreblas instrumental firm, and the insurance coverage firm Santa Lucía with 2.86%. Another 3.5% of the corporate is distributed among the many board members.

Magyar Vagon's method to Talgo is taken into account pleasant as a result of it was introduced to the producer's board of administrators and even has the approval of the reference shareholders.

The Government's concern about this case happens after the entry final September, with out prior discover, of the Saudi STC in Telefónica with 9.9% between capital and derivatives. Playing on the defensive, the State Society of Industrial Participations (SEPI) acquired permission from the Council of Ministers to amass 10% of Telefónica, whereas a digital SEPI is being created as a car that might take the position of reference shareholder in Telephone.

The industrial that means of the takeover bid is to offer better capability to the Hungarian producer DJJ (Dunakeszi Jarmüjavító), owned by Magyar Vagon, specialised in gentle and freight trains with its plant in Dunakeszi (Hungary). Tombor purchased this firm in 2020, from Russian fingers, inside the framework of the Russian invasion of Ukraine. The Spanish model can be maintained, in addition to its two crops in Spain. A bigger measurement for each producers would give them a greater place relating to the deliberate funding in railways all through Europe. Magyar Vagon has acknowledged earlier than the CNMV that it’s on the lookout for an industrial mixture “that creates value for Talgo at a European level.”

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