If there is a concept that this Government is not at all clear about, it is respect for private property, and it has already given many examples of this. An example is how it treats certain companies, which it considers to be its own (of the state) when they belong to their owners and only to them. And if a company is listed on the stock market, its owners are its shareholders. That’s how it should be, but in this country where government interventionism is so well regarded (on the right and on the left), perhaps due to the influence of so many decades of Franco’s regime, there is an attempt, and sometimes successfully, to twist that axiom to benefit political interests.
Talgo (Goicoechea Oriol Light Articulated Train) is a national technological success story whose beginnings date back to the Spanish postwar – as we told a couple of years ago – and whose international expansion has continued to the present. In 2015, driven by liquidity needs, it decided to go public at a price of 9.25 euros per share, which gave the company a capitalization of 1.26 billion euros, a value higher than that of its national competitor CAF (which then it was capitalized a little more than a billion). They place 49.5% of the company among investors, with Triatlantic Capital keeping the rest (which since 2006 owned 63% and after the IPO kept 32%), the Oriol family and a venture capital fund. Currently Triatlantic – which has increased its participation since the IPO – continues to be the main shareholder, around 40% of the entire company.
Talgo’s stock market journey since its listing – already in its first session it fell more than 8% – can be summarized as a failure, and we can see this in the attached graph. Perhaps that is why Triatlantic, in agreement with other shareholders including the Oriol family, decides to look for a buyer for the company and hires Citigroup to do so in the fall of 2022, just when the price reached its minimum of around 2 .5 euros per share. A little over a year later, a buyer appears, after many rumors of possible “boyfriends” among which CAF stands out (a company that today triples the market capitalization of Talgo), it is Magyar Wagon, a Hungarian company, a partner country of Spain. in the EU. But before finalizing the offer, an agreement must be reached with the creditor bank, which slows down the process.
The “Russian connection” is feared and since Government authorization is an essential requirement to continue with the operation, since it exceeded 500 million, a waiting period is established.
In April of this year he finally made official his intention to acquire 100% of Talgo through a friendly takeover bid (the main shareholders agreed) for a value of 619 million euros or 5 euros per share, which brings the price to the of 4.5 euros on the market, reaching a maximum of 4.80. But economic nationalism came out in force to oppose it and although Triatlantic is not exactly Spanish, the idea of “losing” one of the few industrial companies with its own technology raises blisters among the political class, on the right and left. However, the most aggressive statements are those of Minister Oscar Puente on March 6 of this year: “the government will do everything possible to stop the Hungarian takeover bid for Talgo”, making its intentions clear and, for me, demonstrating that what wine later are invented excuses to fulfill that desire. And the “Russian connection” is feared and since the Government’s authorization is an essential requirement to continue with the operation, since it exceeded 500 million, a waiting period is established. The government can stop the operation by arguing that it is a strategic company using the “anti-takeover shield” approved in the pandemic, but first it tries to find other boyfriends for Talgo and tries it with Skoda, a Czech company that is not able to make an offer, leaving ridiculing Minister Puente, his great supporter. Neither do they get the interest of CAF nor the financial support of Criteria.
Litigation with Renfe
Meanwhile, the Hungarians reach an agreement with the debtor banks, undertake not to fire anyone, to maintain their headquarters in Spain and even take a delegation from the Spanish Ministry of Transport and Renfe to visit Hungary in August. But it is of no use, on Tuesday, August 27, the council of ministers vetoes the 100% takeover bid of the company at 5 euros per share, alleging the protection of the country’s strategic interests and using an analysis carried out by the Foreign Investment Board of the Ministry of Economy. They leak to the newspaper The Country that there is a CNI report – of unknown content – that suggests that the Russians could be behind obtaining the technology of changing track gauge in motion (exclusive to Talgo) and that (the carambola is curious) they could use it as an aid for the Ukrainian war. Before the veto, Talgo was trading at 4.30 and that day it closed at 3.925, reaching annual lows on October 14 at 3.32. The reason for the very strong collapse is that the company, which In terms of orders, it is at the best moment in its historyneeds a financial and industrial partner to be able to serve them and it did not appear. To make matters worse, Renfe has a million-dollar lawsuit against Talgo both for delays in deliveries and for breakdowns, something that could well be a weapon of pressure in the hands of such an interventionist government that is famous for its lack of ethics.
Acquisition premium
Finally it seems that, thanks to pressure from the Basque government (Talgo has a large factory in Álava), an investor appears (sidenor) that has financial support and political endorsement from both the Basque and national Executives (there is even talk of the SEPI), and would help (if something is finalized) Talgo to fulfill its order book. The question is: will they only buy Triatlantic shares up to 30% so as not to launch a takeover bid – assuming that the CNMV will allow it – and leave the rest of the shareholders without an acquisition premium or will they have the decency to do the right thing after have so seriously harmed the owners of Talgo, who are all its shareholders? At the moment, the market leans towards the former but who knows, in this soap opera almost anything is possible.
Source: www.vozpopuli.com
