Czech Skoda, backed by Moncloa, presents Talgo merger proposal amid Criteria
After months of maneuvering by Pedro Sanchez’s government to try to stop Hungarian group Magyar Vagon’s bid for Talgolooking for a “white knight” to take over a Spanish train company. … “taken by surprise” fellow traveler, who was tested by the Minister of Transport Oscar Puente himself just a month and a half ago, as reported by the newspaper: Skoda Transportation.
So, yesterday, Talgo confirmed to markets that it had received an offer Czech company merger in the midst of a takeover by the Hungarians. A new actor in the soap opera of the Spanish train manufacturer, which at the moment does not foresee a certain outcome, but on the contrary: “In connection with the information published in the press about the possible interest of Skoda Transportation, we inform “The company has received an offer for a “business combination and industrial integration” from Skoda”, – says the statement sent to the National Securities Market Commission (CNMV).
The experts interviewed pointed to the same important fact as Talgo in order to clarify the situation. how unclear is this sentencesince Skoda’s approach seems to be still in its infancy, since, as the Spanish operator itself says, “the proposal does not contain the economic proposal that they make.”
Therefore, in order to take further steps, Talgo requires the Czech company to provide it with “details of the offer and, in particular, to indicate whether it involves offering the company’s shareholders a higher consideration than that offered by GanzMavag Europe.” Zrt announced in its takeover bid on March 7 whether it would be paid in cash and also explained its current production and financial capabilities. Hungary’s offer is 5 euros per share, which would involve paying $620 million for 100% of the Spanish company.
As ABC learned from industry sources and having data from the Czech group’s 2023 report, Skoda Transportation is not exactly a perfect company “save” Talgo. It was not for nothing that the Czech company recorded a negative EBITDA of 17 million euros that year and a negative result after taxes of 78 million.
The sources interviewed remind us that this is an engineering company without a corresponding presence in Western Europewhich develops and produces components for railways and has no connections with the car manufacturer Skoda Auto, although it has common historical roots.
Moreover, the company does not specialize in the production of high-speed trains (which is what the Spanish company needs), but rather in the production of high-speed trains. specializes in the production of components for wagons and locomotives. for public transport such as metro, trams, electric buses and other activities.
Industry sources agree, recalling, for example, that Skoda Transportation shows results lower than expected in the supply of locomotives and electric trains to Germany, which could have led to its exclusion from the list of suppliers of the German giant Deutsche Bahn, a market that seemed key to its revenues. Similarly, in 2023, contracts were awarded in Egypt and Uzbekistan that were never implemented due to the inability of the Czech state to obtain export credits, among other things because the Czech Republic is a small country with a modest credit rating and aid to the export sector is focused on the automotive industry.
Criteria, will it fit?
In fact, Skoda’s name hit the stock market after the Sanchez government had carried out extensive work to find possible investors as soon as the Hungarian bid was announced, countering the Hungarian bid. Not for nothing, He has been thinking about a possible offer from the Czech Republic for several weeks.which has now been formalized into a hypothetical merger, although it was not the only investor that the executive director approached.
At the time, Moncloa had tried unsuccessfully to convince Criteria Caixa, the investment holding company of the La Caixa fund chaired by Isidro Fine, to take part in the operation and leave Magyar Vagon without options. Isidro Fine’s company, which had always entered Talgo on the condition that an industrial partner would emerge, ended up slamming the door on the Chief, which, as ABC progressed, forced him to travel around Europe in search of other options, as he had done with Skoda. Yesterday, Criteria declined to give any assessment on the matter.
Thus, it is well known that Talgo’s main shareholder, Trilanticis ready to sell its stake of about 40%. But the government does not want this to end with a sale to the Hungarians. When the Ganz Mavag (Magyar Vagon) consortium submitted a takeover bid, several ministers of the executive branch gave Talgo a strategic signal to announce the possibility of vetoing the arrival of the Hungarians through the rules of the anti-takeover shield, which allows the government to approve foreign investment transactions.
However, investors were hardly moved by an operation that seems difficult to crystallize, even though it was supported by the Spanish government, which bases its refusal on the fact that the Hungarian company is close to the far-right Prime Minister Viktor Orban, who in turn is linked to the Russian government of Vladimir Putin, something that Hungarians on Spanish soil themselves are trying to deny these days.
Quote Yesterday Talgo rose just above 4 euros.which is a far cry from the 5 euros offered by Ganz-Mavag, a sign that the market offers few options to Skoda’s alternative offer.