TALGO TAKEOVER | Analysts say it is “difficult” and “unlikely” for Skoda Transportation to make a “counter-bid” for Talgo in cash.

analysts question potential an offer that Czech manufacturer Skoda Transportation plans to release (different from the car brand) on Talgo. Reports from Banco Santander, CaixaBank, JC Capital and Renta 4, accessed by ACTIVOS, the economic vertical of Prensa Ibérica, are classified as “difficult” and “unlikely”. What This company manages to collect an offer exceeding five euros per share. offered by the Hungarian Magyar van to the entire capital.

The shipment of Skoda Transportation took place last Tuesday. letter to the Board of Directors of Talgo proposal “business combination and industrial integration”without detailing the economic proposal requested by the national train maker, in which it seeks confirmation whether it would be better than the offer offered by Magyar Vagon and whether it would be paid in cash. The proposal came in the middle of a takeover bid put forward by a Hungarian consortium on March 7 that was awaiting government approval, although it has not received it. place.

In its report, CaixaBank “considers it difficult” for Skoda “to announce a full takeover at even the same proposed price” on its own, as it would value Talgo at more than 600 million euros, or almost 13 times the EV/Ebitda ratio, although leaves the possibility of doing this with the help of an industrial and/or financial partnerwhich would mean including SEPI into the equation.

In the case of Banco Santander, he believes that for this merger and industrial consolidation to take place, the shareholder must pay in cashas has happened in similar processes in the past, such as the merger of Alstom with Bombardier and Siemens Energy with Gamesa. “We understand that Skoda will propose a relative valuation of Talgo and Skoda, and on the basis of this Talgo will increase capital and transfer shares to Skoda. Talgo shareholders will have to vote for the merger and I wonder if they will accept it without a cash bonus?“especially considering that there is a public takeover offer at a price of five euros per share,” says a report from the Cantabrian company, accessed by this newspaper.

In its turn, Renta 4 doubts that “Skoda has sufficient financial capacity”to be able to offer a higher reward than the Hungarian Wagon” and CaixaBank describes the Czech company as a “relatively small player.” “We do not rule out that the Czech offer could further delay the government’s decision on whether to approve the Hungarian offer,” adds Renta 4, which also highlights Trilantic’s priority in reaching an agreement with Magyar rather than Skoda, especially when the latter has not made any financial offers. The takeover brochure published by Talgo in March acknowledges this. The Hungarian consortium will be entitled to compensation of more than three million euros if another investor launches a “counter-takeover”..

Finally, JB Capitala firm founded by Javier Botín (son of former Santander president Emilio Botín), points out that a “counteroffer” above the five euros per share offered by Magyar Vagon would be “positive,” although it also assures that “Skoda does not seem to be thinking about it.” This think tank considers it ‘unlikely’ that Trilantic will accept any option other than a 100% ‘counter-takeover’ because he currently already has a public offer to acquire these characteristics.

Trilantic will only accept a “counter bid” for 100% Talgo

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Pegasusthe main shareholder of Talgo, a consortium formed by the Trilantic fund, businessman Juan Abello and the Oriol family (founders of Talgo), will agree to a “counter-takeover” by Talgo only if it concerns 100% of the capitalas this newspaper reported yesterday. In no case will Talgo’s first shareholder negotiate the sale of its stake exclusively, excluding one of the options that the government was considering, namely Skoda’s purchase of a stake of less than 30% in Talgo, which would be exempt from launching a takeover bid and that the remaining 10% in the hands of Trilantic was acquired by another financial partner, allowing the British fund to exit its stake.

Anyway, The Magyar Vagon remains Trilantic’s favourite. because it has been trading for almost two years, since December 16, 2022, and, on the other hand, because the payment will be made in cash, without any exchange of shares, which will allow the fund to complete its investment cycle. Moreover, most of the agents involved agree that Talgo’s problem is not with the shareholders, apart from the fact that the British fund has completed its investment cycle, but with the industry. For this reason, in addition to finding one or more candidates who can offer 600 million, what is important is what industrial plan they propose.