Analysts’ view on looming bidding war for Atlantia – Metro US

Analysts’ view on looming bidding war for Atlantia

FILE PHOTO: A logo of the Atlantia Group is seen
FILE PHOTO: A logo of the Atlantia Group is seen outside its headquarters in Rome, Italy

MILAN (Reuters) – Shares in Atlantia jumped almost 12% to their highest levels in over two years after Global Infrastructure Partners and Brookfield Infrastructure pitched a possible takeover of the Italian road and airport operator.

The funds have an agreement with ACS under which the Spanish construction company could acquire a majority stake in Atlantia’s toll road concessions if any offer was completed.

The two funds said they had pitched a potential takeover of Italian road and airport operator last week after meetings with its main shareholder, Benetton family’s Edizione.

However, the Benetton family, investment fund Blackstone and other long-time investors in Atlantia are studying a counter-move to buy the company, three sources with knowledge of the matter said late on Wednesday.



The potentially very large size of the transaction, given Atlantia’s capitalization vs. ACS’s one, as well as hypothetical interest from other investors, led the broker to “think that the theoretical motivation could be, for example, the break-up of the Italian company.”

“We believe that for this hypothetical transaction to succeed, ACS and its potential partners would need the support of Atlantia’s main shareholder, the Benetton family. Even on this assumption, the theoretical deal would be markedly complex due to valuation, political, and financing considerations.”


Based on current information, ACS is interested in Atlantia’s toll road assets, but probably also the Italian’s company 16% stake in Hochtief; joint offer with funds “could mean a final shareholding for ACS below 50%, and ACS would avoid the consolidation of Abertis.”


“The deal (for ACS) looks big, complex, difficult to execute, and could be expensive especially if a bidding war takes place. In addition, this would be the second time that ACS makes a move for Atlantia, which raises the chances of it paying up to succeed.”


“At this stage, it is unclear if there will be a bidding war for Atlantia. If it is the case, ACS will have to explain how a competing bid can add value for its shareholders,” it says.

“The competition to acquire top-quality infrastructure assets is very high, particularly from infrastructure funds and pension funds. Consequently, we expect ACS to try to leverage its relationship with the Benetton family and Atlantia to test waters ahead of a potential deal with any of the former two.”


“If stock is up 10-15% in the next few sessions I would be more a seller than a buyer as this is going to be another special situation with politics involved” and, with Benetton controlling one-third of the capital, any hostile bid would be “quite hard to materialize.”


Any combination with ACS may lead to further synergies on Atlantia’s Latin America business. The broker adds however that given stake that Benetton hold in Atlantia, and the ongoing buyback, “a hostile bid could be challenging.”


Analysts at Intesa Sanpaolo agree that an unfriendly bid of ACS seems “unlikely to succeed and it would also put into question the partnership with Atlantia on Albertis.”


Bestinver says instead that a possible war for control of Atlantia “would undoubtedly benefit minority shareholders but would risk becoming too costly for the contenders.”

Hence, the brokerage does not rule out that the Benetton and Florentino Perez, who owns ACS, may come to an agreement, jointly delisting the Italian group and then proceeding with a break-up.

(Reporting by Federico Maccioni and Danilo Masoni; Editing by Keith Weir)

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