The government requires the CNMV to cancel its authorisation of Atlantia’s bid because it needs to have prior approval for the operation. The argument is well known: the State has to give the green light to any operation involving Abertis before this can be carried out (ar. 26,2 of the Takeovers Law). That said, both the procedure for making this request, as well as the obligation itself for having to do it, appear to be subject to different legal interpretations.
For Bankinter analysts, the company’s share price is likely to take a hit today (for example:-1% to €18,41?), in the face of the possibility that the bids’ process will be entrenched for some time. But today’s probable decline could be an opportunity to take positions in the stock at a lower level. The situation and the interpretation are confusing from a legal point of view. ACS already sought previous authorisation via its subsidiary Hochtief, which launched a bid for Abertis improving on that of Atlantia (€18,76/share vs €16,5 offered by the Italian concessionary, although both operations include different combinations of cash and shares).
However this doesn’t put ACS’ offer in a better position than Atlantia’s as far as procedure goes, given that its bid is conditional on there being a previous one which has been authorised. As a result, if Atlantia’s takeover is revoked and/or the potential procedural deficit is not amended, and/or if this matter were to end up in court, both bids would be annulled.
From Bankinter’s point of view, the most reasonable thing is:
That the CNMV revokes the authorisation given to Atlantia’s bid. The latter then seeks prior approval from the Government, which grants it with some restrictions (the sale of Hispasat at least), and both bids end up being valid. But this process will cause a 2-3 month delay in the effective launch of the already existing bids. Whatsmore, until the situation is clear, Atlantia will not consider improving its original offer, nor will a third player – in a hypothetical case – lodge another offer, as we don’t rule out could happen.
In Bankinter’s opinion the acquisition of Abertis could be finally decided via a closed envelope bid between Atlantia and ACS, as laid down in the Takeovers Law. For this reason, the analysts continue to have a Buy or Hold recommendation on Abertis shares(depending on whether one is already a shareholder or not). The exception would be those shareholders who want to completely close off any risk (defensive-moderate profiles) after obtaining a stock price revaluation of +14% from the €16,35 euros that Abertis was trading at on the day before Atlantia announced its bid.
In this latter case, and from a prudent perspective, the best thing would be to sell the shares in the market. We believe it has been worth it holding on to Abertis shares, and still is, even despite today’s news. This is because developments can only continue to favour minority shareholders. From this point of view, the likely drop in Abertis’ share price today could be an opportunity to get back into the stock.