Taqa is in talks with CVC and GIP over a $26,000 million takeover bid for Naturgy.

Takaone of the energy giants of the United Arab Emirates (UAE) CNMV confirmed yesterday that it is in negotiations with CVC and GIPtwo main shareholders Naturgy, takeover of this company.

Reach an agreement so that these two shareholders are againstendan, and since their sum is more than 40%, Taka admits that absorption must be 100%which could lead to largest transaction of this type on the Spanish stock market since the purchase of Endesa by Enelalmost two decades ago.

Taqa does not disclose prices. Market sources indicate that this could be in the range minimum from 25 to 28 euros per share. Shares rose more than 6% yesterday. This increase, added to the revaluation on Tuesday when the possibility of a takeover bid for Naturgy was already apparent, represents a rise of more than 10% to €22.84. The market sets the price itself. This year Naturgy peaked at 27 euros, which would be the minimum price at which negotiations could take place.

Easter and money

Close sources indicate that they began shortly before Easter. If we take 27 euros per title as a guide, then the 100% takeover proposal would mean 26.2 billion. Euro. This amount would far exceed Atlantia’s $16,000 million bid to take over Abertis. in 2017 and will remain lower than Enel and Accionalaunched in 2007 on Endesa for over $40 billion.

Taki’s offer is expected to be made in cash. Yesterday, just a few minutes after the market opened, CNMV has suspended trading of Naturgy. According to EXPANSIÓN, CNMV has sent requests for information about a possible takeover bid to Taqa, CVC and GIP.following news published in this newspaper reporting that Taka hired Rothschild and Lazard to analyze the Naturgy proposal.

CNMV resumed trading of Naturgy only after Taka informed the regulator.. In particular, the Arab group explained that “is in negotiations with CVC and GIP regarding the possible acquisition of its shares in Naturgy”. CVC in alliance with Alba Corporation (March family), has just over 20%. GIP has a similar percentage. If this acquisition were to take place, Taka argues, “it would be necessary to make an offer for the entire capital of Naturgy.” Admit it “an agreement has not yet been reached”. And that “there is no assurance that any transaction will be carried out, nor certainty as to the conditions under which, if applicable, it may be carried out.”

Agreement with criteria

Taka explains that “there was no approach to Naturgy.” The Emirates Group also hints that “is in negotiations with Criteria Caixa (the first shareholder of Naturgy with a share of 26.7%) in relation to a possible cooperation pact.”

This point will be crucial for the takeover to move forward.. Criteria already informed the CNMV on Tuesday that it maintains its long-term commitment to Naturgy and that was limited to facilitating dialogue between the “potential investor” and other shareholders “to explore alliances with possible partners that would allow Naturgy to deepen its transformation.”accelerate the energy transition and facilitate shareholder restructuring according to various formulas.”

The continuity of Naturgy’s criteria will allow it to retain its Spanish character and gain government approval for Taqa’s takeover bid. Spanish that supports veto power for foreign investors in strategic assets.

Moving to the stock market

Apart from the price, this would not be enough. specify the terms of the takeover offer, such as minimum acceptance. And also what will happen next. One of the goals is to open a window for selling CVC and GIP. Do you also want to improve free swimming (freely quoted capital).

Absorption will lead to reduction free swimming and may result in delisting. During the negotiations it is assumed that Once Taqa achieves a majority, it will transfer a portion of the capital (IPO) at equivalent prices. as Enel did with Endesa in 2014. Criteria could buy more securities. The goal will be to maintain at least 60% between taka and criteria as the optimal percentage.