TAKA | Opa about naturgy: a law that is a corset for Abu Dhabi and gives freedom to criteria

Last Wednesday, Takaenergy company controlled by the United Arab Emirates announced it was supporting conversations with CVC and GIP funds For buy a share of which 20% each, V Naturgy. In a statement, Abudabi acknowledged that if an agreement is reached, which has not yet been reached, it would have to formulate a proposal for a public acquisition (takeover bid) of the entire capital of the Spanish energy company. The proportion of shares Naturgy is controlled by most criteria, the investment arm of Fundación La Caixa, which holds a 26.7% stake, are titles that Taqa is not interested in acquiring. Among the participants is FMI, which carried out a takeover bid in 2021, the result of which was not as expected, but allowed it, together with the shares it acquired directly on the market, to reach 15%.

Without precise details of the specific movements of each of the funds involved, since the operation is at an early stage, although already at an advanced stage, if Taqa reaches an agreement between GIP and CVC to acquire their shares, it will receive 41%. This position, according to Royal Decree 1066/2007 of July 27 on the regime for public offers for the acquisition of securities, is considered a “controlling participation”, since it amounts to more than 30%, which obliges the Abu Dhabi state company formulate a takeover proposal for all shares and is addressed to all its owners. This would mean setting a price and beginning the usual procedures for such an operation: writing a prospectus, which must be approved by the government and the National Stock Market Commission.

Possibility of increasing the share of participation of “Criteria”

At this stage Criteria can continue to increase their participation above 30% without having to submit a takeover bid. The fourth article of the above-mentioned Royal Decree-Law allows the CNMV to exclude the obligation to formulate a takeover bid if there is (in this case Taqa) another investor whose voting percentage exceeds 30%. However, according to sources at the stock market regulator, this would be the “exception” and not the “norm”. Normally, Criteria would be forced to make its own offer, starting a takeover war.

The exemption that Criteria can avail of can only occur in the absence of an agreement between the major shareholder making the takeover bid., in this case, so is the investor, whose share exceeds 30%. In this case, if one party is considering a takeover bid and the other is expanding its position, the regulator may understand that there is an agreement between them to gain control of Naturgy. If this happened, the CNMV would force both to formulate a joint takeover offer for all shares.

Market sources interviewed believe the most likely outcome is that the moment the Abu Dhabi clean energy group enters into an agreement to take over the 41% stake held by CVC and GIP, it will make a bid for 100% of the company. Depending on the outcome of the operation and acceptance by minorities, Taqa will seek to balance its weight in Naturgy’s shareholding with CriteriaCaixa’s stake.by placing part of its stake on the stock market.

Apart from the fact that the government was positive about this since the influence of foreign interests in the company was reduced, it will strengthen free swimming companies, the number of shares that are bought and sold on the market is only 13% of the authorized capital. This bass free swimming led to the exclusion of securities from some indices, for example, MSCI (Morgan Stanley Capital International). The CNMV even sent a letter to the Spanish energy company recommending measures to improve the liquidity of its stock market: the advice included raising capital or selling securities by the four largest participants.

Government is the first obstacle

The main obstacle in this whole operation, which will be discussed by the four parties, between Taqa, Criteria, CVC (hand in hand with Banca March) and GIP, with the exception of IFM, the main obstacle is the government. The key to the success of all this depends on him. First, the executive branch has what is commonly known as “anti-hazard shield”regulated by Royal Decree 571/2023, permit or deny entry to any foreign investor who wants to reach 10% of the capital of a “strategic” company. That is, even if you reach an agreement to purchase shares of CVC or GIP, it will be subject to government approval.

Secondly, if Taqa’s share exceeds 30%, it will be forced to submit a takeover bid. This operation, according to the same resolution, will require another resolution from the Council of Ministers. This is not news, since in a case such as Talgo’s purchase of the Hungarian Magyar Vagon, the continuity of the operation depends on Moncloa.