Talgo minority shareholders consider filing court challenge to government block on Hungarian takeover

The Transport Ministry’s stated resistance and the government’s silence on the public procurement offer (OPA) put forward by Hungarian group GanzMaVag for Talgo last March have prompted minority shareholders in the Spanish train maker to warn that they are considering suing the government for material liability, “claiming not only compensation for the consequential damages that shareholders may suffer due to the fall in share prices, but also for the loss of profits due to the failure to implement a very attractive offer for minority shareholders, depriving them of the opportunity to sell their shares at a price of 5 euros.”

The company’s price this morning is 4.10 euros, suggesting little confidence in the bid’s success. The Association of Minority Shareholders of Listed Companies (AEMEC) believes that Talgo investors are left completely exposed by the government’s application of an anti-takeover shield by the Foreign Investment Board, under the direction of the Ministry of Foreign Affairs. Economy.

In his view, the offer to take over Talgo’s entire share capital for 619 million euros is beneficial to the company’s more than 8,000 shareholders not only for economic reasons, but also because it provides Talgo with a solution to its industrial emergencies, strengthening the strength of the European Union industrial group, which is hungry for markets that the company has been unable to access so far. In this sense, they agree with the company’s majority shareholders, led by the Trilantic fund, who described Ganz Mavag’s offer as “friendly” back in March.

The problem is that Talgo is considered a strategic company and the government is investigating the applicant company’s connections to the circle of Hungarian President Viktor Orbán. Both the businessmen associated with Ganz MaVag and the funds that present themselves as investors have relationships with this circle, and the government fears that these relationships will extend beyond Hungary’s borders to the Russian regime of Vladimir Putin.

For the minority association, these issues are not as important as the fact that the Hungarian offer includes an industrial plan that will solve the problem that Talgo’s factories are facing due to a lack of investment and capacity, which leads to delivery delays. At the same time, they add that the fact that the Czech manufacturer Skoda has submitted a declaration of interest in buying Talgo without specifying a price or deadline is nothing more than interference in the process, so that the Czech company is also on the list of potential defendants.

Since the Ganz MaVag proposal materialized last March, the government has failed to find an alternative buyer, despite canvassing train manufacturers such as Alstom and financial groups such as Criteria. At the moment, the only option on the table is a veto by the company, which, despite its obvious links to a nationalist government that is pushing theses that the European Parliament and the European Commission want to isolate as hostile, comes from the EU. The minority association is demanding that the government make a statement in August this year and not let the proposal die for lack of a response.