ACS: Texas could terminate SH-288 motorway concession early and compensate company with €1,600 M

autopista sh288 acs

Bankinter| The State of Texas could make use of its contractual right to claim the return of the SH-288 toll road to the amount of $1,731M (about €1,600M) currently controlled 43.24% by ACS and the remaining 56.76% by Abertis. Last Thursday, the state transport commission gave its approval to the plan and a six-month negotiation period is now open to either terminate the contract or avoid it.

Bankinter’s analysis team’s opinion: The news is not positive for ACS and this was reflected in the company’s shares last Thursday when the possibility of the termination of the concession became known (the shares fell -3.15%). In any case, we believe that, as negative as the possible loss of an attractive asset such as SH-288 is, the financial compensation means that the effect on ACS’s valuation is limited and therefore the impact should be limited to the short term. In this regard, it should be recalled that the acquisition prices paid by ACS for 56.76% last year was €1,063m and for 21.62% of Iridium (an ACS subsidiary) was €383m.

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