Criteria buys 9.4% of ACS in a 1 billion transaction | Companies | EUROtoday

CriteriaCaixa, the holding industrial of the La Caixa Foundation, expands its energy within the Spanish enterprise neighborhood and has simply introduced in a related occasion despatched to the National Securities Market Commission (CNMV) the acquisition of as much as 9.4% of ACS (Construction and Services), the corporate chaired by Florentino Pérez. The operation quantities to 983 million euros and represents the grand entry of the establishment chaired by Isidro Fainé into the development firm, the place it had no presence till now.

CriteriaCaixa thus turns into the second largest shareholder of ACS and can suggest to its board of administrators the appointment of Fainé himself as a proprietary director. The major shareholders of ACS are Florentino Pérez (14.16%), Societe Generale (6.58%), BlackRock (5.97), Alberto Alcocer (2.36%) and Alberto Cortina (2.8%).

It is Criteria's second main operation in only a week, after it turned recognized final Tuesday that it plans to double, from round 5% to 10%, its presence in one other of the massive Spanish corporations, Telefónica. Previously, in lower than a month, it had introduced two different main purchases: 3% of the not too long ago launched Puig on the Stock Exchange, in alternate for some 425 million euros, on the finish of April; and one other 14%, as much as 17%, of the true property firm Colonial, inside a capital enhance of about 600 million euros, in mid-May. ACS shares closed on the inventory market this Friday with an increase of two.77%

“The operation is part of the investment policy of CriteriaCaixa – a company chaired by Isidro Fainé and whose CEO is Ángel Simón -, which selects leading companies in highly attractive sectors, with the capacity for growth and generation of value,” he added. a part of the corporate.

Likewise, “it allows us to consolidate the CriteriaCaixa model, which over the years has built a portfolio with notable shareholdings in strategic sectors of the economy, such as banking, energy, telecommunications or water, among others. A strategy that has been reinforced in recent months, with significant operations such as the increase in participation in Telefónica, as well as the entry into the capital of other top-level companies such as Colonial and Puig, which offer greater exposure to sectors such as real estate and fashion and beauty,” Fainé's company explains in a summary of its latest movements as well as a justification for this million-dollar investment.

And this presentation has not yet included the role that it can play in the new Naturgy shareholding when the agreement it has with the Emirati Taqa and the takeover that is being prepared for the energy company of Catalan origin are consolidated.

For its part, ACS has detailed that the operation has occurred through “the early cancellation of the two contracts forward on treasury shares, settleable exclusively in cash for differences, which currently affect a total of 25,431,299 treasury shares to be purchased by CriteriaCaixa.” These unique contracts (later prolonged) have been signed in 2020, in the midst of the pandemic. According to what the corporate communicated to the CNMV, they granted the corporate buy choices on 20 million shares in three tranches (one in every of 12 and two of 4 million shares) at costs of 14 euros (12 million), 17.6 and 19.5 euros. On these similar sections, the monetary establishment had symmetrical put choices at 14, 14.5 and 16.5, as reported to the CNMV. The contracts expired in February 2021, however in 2020 they have been changed by a contract for variations (CFD) which, subsequently, the corporate and the monetary establishment have prolonged on a number of events. At the time, ACS didn’t point out the monetary entity with which it signed the contract.

This complex contract, called reverse collar In financial jargon, it allowed ACS to secure the possibility of purchasing shares at a guaranteed price (and therefore benefit from an eventual increase) thanks to the purchase option. But the put option also implies the risk of losses in the event of falls below the lowest prices. At the time of signing, ACS shares, hit by the pandemic, were trading at around 20 euros, half the current price. “It belongs to the family of so-called Zero-cost strategies, because it does not involve the disbursement of any amount of money at the time of formalizing the contract,” explain market sources. “It is a bullish position, in which you can win if the market goes up and lose if the market goes down.”

In the 2023 audit report, ACS included the market value of the contracts: 520 million euros as of December 31, compared to the 239 million euros at which it was valued at the end of 2022. The difference in valuation between the two calculations, plus the effect of the modification of the exercise price, assumed a positive financial result of 360 million in last year's accounts. In parallel, ACS had deposited 123 million euros as collateral, a standard practice in derivative contracts. The rise in the ACS share this 2024, from 26.77 to 39.9 euros, will have further increased the market value of these contracts, but so far neither ACS nor Criteria have specified the financial impact of the early cancellation . According to the Bloomberg agency, the Spanish market this morning registered a block operation of 12.7 million shares (just over half of the operation) at 38.64 euros per share.

Infrastructures also digital

CriteriaCaixa not only considers the weight of the ACS Group as a global infrastructure operator and provider with more than 135,000 employees around the world, a turnover of 35.7 billion euros in 2023 or a project portfolio that amounted to 73.5 billion euros. “In recent years, ACS has also developed a new structure and focus on new growing sectors, such as technology and digitalization, the energy transition, sustainable mobility and critical minerals. This is a commitment to sectors that are of interest to CriteriaCaixa and that especially justify this investment decision,” says the entity led by Isidro Fainé and Ángel Simón.

In fact, ACS itself has also recently signed up to invest in one of the big fashionable niches, such as data centers, on the front line this week due to Amazon's billion-dollar bet in Aragon. It did so with the purchase of land in Alcalá de Henares at the end of last year to manage a first 50MW installation. Behind the decision lies the repeated commitment by the CEO, Juan Santamaría, in various public presentations of a diversification in “new generation” infrastructures.

Already in its traditional business, “ACS has achieved a excessive stage of geographical diversification in recent times, with a particular presence in areas with nice development potential, akin to North America, Asia-Pacific and Europe,” explains CriteriaCaixa. The ACS Group has comprehensive service subsidiaries such as Turner (North America) and Cimic (Australia); infrastructure, where Abertis and Iridium stand out, mainly; and engineering and construction, with Dragados, among others.

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