Talgo’s board to meet on Tuesday to review Skoda merger proposal

The council will have to evaluate this business combination proposal, decide whether they think it is necessary transfer of information about a company to a potential competitor or consider making an appointment with them. Even, Talgo I could continue to ask for more information if necessary, as it already happened at the first expression of interest of the company. In fact, there is still no economic proposal.

In this second letter The Czech woman assured that she wants to start a dialogue with the Spanish manufacturer “to obtain discreet access to the information necessary to propose, if we decide to do so after analysis, an industrial combination of the two companies.” That is, he maintains his idea of ​​​​merging the company and excludes a counter-takeover.

“Our intention is to take advantage of the industrial merger and our main goal is not to gain control of Talgo. We also do not intend to privatize the company.Therefore, we are not currently considering placing an offer for Talgo shares,” they noted.

Except, The company insists its approach is “serious and legitimate” and that there is nothing to stop Talgo’s board of directors from opening its books despite the fact that a takeover bid (by the Hungarian company Magyar Vagon) is currently underway, although they acknowledge that it is within their power “to promote or not to promote such alternatives.”

In any case, they acknowledge that the decision whether or not to encourage such alternatives is taken by the board of directors of a Basque company, taking into account the interests of the company, its shareholders and other interest groups.

Skoda was very insistent in proposing to merge the businesses.“Such a possibility would be completely legal and reasonable for the Talgo Council and would not be contrary to the law,” they say.

In the four-page letter, Skoda details the benefits of merging both companies, defending its solid balance sheet with revenue of $1.4 billion and an extensive network of services and solutions..

There is also the possibility of arranging a meeting with the Spanish manufacturer. “We would be happy to meet you so that you can get to know the Skoda Group better and explain why we think that a combination of the two companies would be so attractive,” they say.

Minority shareholders

With this in mind, heTo Spanish Association of Minority Shareholders (Aemec) reiterated that it was considering legal action to protect shareholders’ rights and prevent this maneuver from damaging Talgo’s share price.

From Aemek is closely monitoring this issue to analyze whether Skoda Transportation “led a maneuver to change the market price of the only known offer”.

“Market abuse or market manipulation can not only be classified as an administrative offence and an act of unfair competition, but in our criminal code it is classified as a crime,” they add.

They also ask for “timely protection from the CNMV to defend their rights, which are currently completely unprotected.”

Possible sale of Skoda.

But Skoda’s intentions are at odds with its specific situation.The Czech PPF group has been trying to sell its railway division (Skoda Transportation) for some time now. Just a few weeks ago he asked Magyar Vagon to buy it. and this happened in the midst of a takeover bid for Talgo by Hungary, as confirmed by sources in the EL ESPAÑOL-Invertia sector.

Skoda has hired JP Morgan to scout the market and find a buyer, something it has been doing since the death of the PPF Group founder in 2021. “His heirs have approached JP Morgan to help sell the rail business,” say industry sources.

Actually, JP Morgan has already tested Asian and European locomotive and carriage manufacturers.. It is currently unknown whether there is any group that has submitted a bid. According to market sources, there are opportunistic financial investors who are also looking into buying the Czech railway group. Among the possible interested parties for Skoda could be the Indian TATA group. Skoda, for its part, denies that it has entered into contracts with financial institutions for a possible sale.

One that Skoda doesn’t seem to be very interested in is the Magyar Vagon.The Hungarian company itself has already discredited the company and publicly rejected it as a possible partner for the purchase of Talgo. mainly due to the 78 million loss it incurred in 2023.

“Skoda could be interested in a deal. It used to be a big player, now it’s making losses, which means it’s not a strong candidate for cooperation,” said Andras Tombor, a senior executive at Magyar Vagon, during a visit to Spain to defend the Hungarian company’s takeover bid despite concerns from the Spanish government.

Let us recall that in March this Hungarian consortium offered 619 million euros for 100% of the company at a price of 5 euros per shareIn principle, the takeover is being carried out with the support of Pegaso, an instrument company that holds 40% of the shares owned by the Trilantic fund and the Oriol and Abello families.

A proposal that the Spanish government has always shown reluctance to accept. According to the director, there are links between the Hungarian group and Russia. It should be remembered that 45% of Magyar Vagon is in the hands of the Corvinus Foundation, controlled by the Hungarian government. And Hungarian Prime Minister Viktor Orbán is the leader of Hungary’s ultra-conservative Fidesz party.