Sabadell | Blackstone Infrastructure Partners (29% Enagas) has launched a non-binding offer to increase its holding in the US Tallgrass from 44% to 100%, which would mean that Enagas would go from 12.5% to 25% indirect if it decides to participate, which has still not been decided.
According to the press, the offer values Tallgrass at 3.5 Bn$/3.158 Bn€ (+36% premium over the previous close but -17% below the price paid by Enagas in its first investment). Pending confirmation of Enagas´ interest, the next step will be to know its contribution to the holding company to proceed with the purchase. In this respect, in the first investment in Tallgrass, Enagas agreed to invest an additional 300 M$/270 M€ in future investments, so we would expect a cash outflow about these levels.
Negative news because although the second round of investment would be at a better price (9.2X EV/EBITDA vs 9.4X at which Enagas is trading), the contribution in valuation is neutral and could negatively affect the rating (we recall that S&P lowered Enagas´ rating in the first round of investment. Despite the limited information, we think that it is a purchase which, even if it fits well as a strategic level (Tallgrass owns 11,000 km of gas transportation pipelines, 2,400 km of gas extraction pipelines and 1,300 km of oil pipelines), is demanding in the creation of value.
