Talgo confirms possible takeover bid talks at €5/share: recommendation from Buy to Sell


Hungarian consortium Ganz-MaVag Europe Zrt. (Magyar Vagon) confirmed on Friday that it is holding talks and negotiations for a possible takeover bid for 100% of Talgo (TLGO) at €5/share without an agreement having been reached yet.

The talks focus on the financing of Talgo (TLGO) subject to change of control. As the National Securities Market Commission (CNMV) does not allow the offer to be made subject to the condition of obtaining the consent of the financing entities for the change of control, the Hungarian group has stated that there is no certainty that a takeover bid will finally be made.

Although there is no certainty of a takeover bid (which should also have the approval of the Government and of TLG’s main shareholders: Pegaso T. 40% and Torrblas 5%), the interest is clear, which would confirm the possibility of a corporate operation in the Company.

The CNMV, which had suspended trading last Thursday, lifted it on Monday at 8:30 am. Given the low additional potential (+5% up to the price offered in the takeover bid), taking into account that it is already trading above our target price and considering it unlikely to see a counter takeover bid, the recommendation is changed to Sell.

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