Criteria completes agreement with Abu Dhabi group to announce friendly takeover of Naturgy | Companies

Yesterday, everything was planned for Naturgy to send the relevant fact to the National Securities Market Commission (CNMV), reporting an important corporate transaction, according to which the Emirati group will negotiate the purchase of 40% of the capital of the Spanish energy company. Movement developed Vanguardwill lead to the creation of two main shareholder funds (GIP and CVC, with all…

Yesterday, everything was planned for Naturgy to send the relevant fact to the National Securities Market Commission (CNMV), reporting an important corporate transaction, according to which the Emirati group will negotiate the purchase of 40% of the capital of the Spanish energy company. Movement developed Vanguard, will give an exit to the two main shareholder funds (GIP and CVC, with a stake of just over 20% each) locked in the capital for several years. Solvent sources assured Five days that the main candidate is the oil company of the United Arab Emirates, Adnok (Abu Dhabi Nationa Oil Company), or rather TAQA, a subsidiary of the said group, producing renewable and environmentally friendly hydrogen.

Both parties are finalizing an agreement with these funds and with the main shareholder CriteriaCaixa (26.7%) to launch a friendly takeover bid for 100% of Naturgy’s capital, which is required by law to seek to buy more than 30% of the capital. This is the main option in the table.

The talks, which have been in the works for more than a month, were conducted with the knowledge of the government, which, compared with other investor options for Naturgy, such as Russian groups or groups from other Arab countries, did not condemn the entry of the Emirati group, the same sources indicate. They suggest that the future shareholder will be subject to mandatory government permission to enter the Spanish company, whose main strategic asset is the gas contracts it maintains with Algeria.

Criteria (in particular, CEO, Angel Simontogether with the President of Naturgy, Francisco Reines) played an important role in the negotiations. In fact, the same sources add, Criteria will refrain from participating in the takeover bid, and the company’s fourth shareholder, Australian fund IFM (15%), is likely to do the same. The negotiations will be so advanced that there are even those who claim that shareholders have reached an agreement on the management of Naturgy.

The deal would clear the way for GIP and CVC, which had already attempted to spin off Naturgy in February 2022 through Operation Gemini, designed to separate liberalized assets from regulated assets to facilitate a sale given the impossibility of selling at such a high price. packages. The initiative, launched on the eve of Russia’s invasion of Ukraine, collapsed after markets collapsed.

Adnoc is the main oil company of the United Arab Emirates and has gas reserves. It is headed by Sultan Ahmed Al Jaber, who is credited with a close friendship with the honorary king of Spain.

CVC and GIP had little incentive to sell their shares at current market prices, resulting in the loss of much of the capital gains accumulated in recent years, despite Criteria’s intentions. Financial sources indicate that the investment bank has intensified its search for this partner in recent weeks on behalf of the holding company run by Isidro Faine. The condition is that the new partner will take over the management of the company, employment and maintain its headquarters in Spain.

Australian fund IFM will remain on the sidelines, which has a 15% stake and entered the company via a partial takeover in 2021. Relations with Criteria were initially tense due to the unexpected capital entry, but gradually they eased a little. IFM has always stated that it is a long-term shareholder of the company, focused on driving growth and has no prospect of selling its stake. This all exploded a few weeks ago at the energy company’s shareholder meeting, where IFM decided to change its vote from “yes” to “abstain” on the board’s remuneration report, with the idea of ​​joining Criteria in a similar vote. , which ultimately went from abstaining to a positive response. The market saw this move as an attempt to oust Francisco Reines from the presidency.

It’s no secret that CVC and GIP have been seeking an exit from the company for some time. However, the fall in the stock market in recent months makes these types of deals less attractive. This is not the case for a buyer who discovers a significant impairment. Naturgy shares closed yesterday at €20.8 per share, just 9% above the €19 they set in 2016 and 2018 respectively. At current prices, these funds will pocket about 360 million each. The amount is not insignificant and adds to the generous dividend policy, but it is much lower than a few years ago when Naturgy shares traded above €29 per share. IFM, which announced a takeover price of €22.07 per share excluding dividends, is directly losing money at the current price.

An alternative could be to increase the company’s liquidity on the stock market, which is one of the factors putting pressure on its price recently. This had its correlation with exclusion from MSCI indexes, which led to the company falling by 23% for the year.

Faced with repeated blocking by Third Vice President and Minister of Ecological Transition Teresa Ribera of Gemini’s plan to provide a solution to Naturgy shareholders, in this case the government itself dealt with the Abu Dhabi government to achieve a good outcome. imposing conditions, among other things, on employment and maintaining its headquarters in Spain.

In IFM’s takeover of Naturgy itself, it authorized the deal only with conditions such as maintaining jobs, headquarters, investments, curbing debt and dividends, and continuing to list on the stock market. The executive is currently examining whether BlackRock should submit to anti-takeover protections when acquiring GIP.

Although the cases are not comparable, the chief executive outlined positions in Telefónica’s question regarding Middle Eastern investments in Spanish companies. He has not yet made a formal decision to create a Saudi STC at Telefonica, but this has led to SEPI entering the capital with 5% (which it wants to increase to 10%) to protect the Spanish decision-making core.

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