Ferrovial has worked hard in recent days to win support among its significant shareholders and move forward at today’s shareholders’ meeting with its plan to transfer its headquarters to the Netherlands. The efforts bore fruit in part yesterday, with the decision of the Norwegian sovereign wealth fund to change the direction of its vote and support the operation. He was the only one of the top ten shareholders outside the founding family to have opposed the plan to date.
Norges Bank Investment Management (NBIM), which manages the investments of the Norwegian pension fund, reported yesterday that it will vote in favor of item ten on the agenda of the Ferrovial shareholders’ meeting, which refers to the reverse merger operation for the transfer of headquarters. A day before, he had announced his rejection, alluding to the difficulty in making a “fully informed” decision, a circumstance that no longer occurs after last-minute contacts with the company.
For Ferrovial, this change in criteria clears the way to the Netherlands even more. Norges Bank only has 1.49% of the company, but the percentage has a greater weight than it seems because the shareholding is very diluted and because of the influence of the Norwegian fund. It manages close to 1.4 trillion euros and is a benchmark in good investment practices.
At the moment, the only explicit rejection of the operation is that of Leopoldo del Pino, who has 4.24% of the company. On the other hand, his brothers Rafael and MarÃa, the first of them president of the company, support it, and add up to 28.6% of the shares. The activist Chris Hohn, with 0.9% of the capital, also supports the plan, together with the three largest voting recommendation agencies worldwide, with the capacity to drag significant shareholders such as Lazard, BlackRock and Vanguard, with shares each one of them between 3% and 4%.
Today’s meeting, which will be held at 12:30 p.m. on Paseo de La Habana in Madrid, will not require a quorum, as it will be held on second call, which also facilitates the company’s plans. 52% of the capital is distributed among thousands of small shareholders with shares of less than 0.9% and, if all the Spanish investment outside the family is added, it does not reach 10% of the total.
The only blocking option would consist of the right of separation enjoyed by shareholders dissatisfied with the proposed exchange. Ferrovial will pay them 26 euros per share if they want to disassociate themselves from the project and sell the shares. If the requests add up to more than 500 million euros, which is equivalent to about 2.56% of the capital, the company will give up the operation. Leopoldo del Pino will vote against it at the meeting, but has reported that he will not sell the shares in this process.
An incentive to exercise the withdrawal right would be for the share price to be below 26 euros, but this is not the case. Yesterday they closed at 27.14 euros, and they did so with a rise of 1.23%, in an indication that the market understands that the die is cast in favor of the company. Ferrovial has risen 3.35% on the stock market since the announcement of its change of headquarters.
In the transfer, small investors will lose their ability to influence shareholders’ meetings, as the voting recommendation agencies themselves have recognized. Dutch regulations establish limitations to their participation that do not exist in Spain.
The Government continues to reject the change of venue head-on and insisting that it may have tax consequences. The Minister of the Presidency, Félix Bolaños, said yesterday that shareholders “have every right to know the truth” and to make an “informed” decision, and the Minister of Finance, MarÃa Jesús Montero, warned the company that it may suffer a tax hit if you do not adequately explain your decision. “The legislation is clear. When there are no economic reasons, there are certain tax elements that cannot be applied to the company, â€she said, referring to the exemptions in this type of operation.
The General Council of Economists (CGE) calculates that Ferrovial could face a tax penalty equivalent to 25% of the latent capital gains of its assets if the Tax Agency concludes that there are no valid economic reasons for the transfer. The president of the CEOE, Antonio Garamendi, affirmed yesterday that “pressuring” Ferrovial to stay in Spain “is not the most appropriate way” to achieve the objective.
The company has insisted that it is not leaving because of the lower taxation in the Netherlands, as the Government says, nor because of the country’s legal uncertainty, as indicated by the opposition. Its objective, he insists, is to be listed in the United States and gain international projection, since 82% of the income is obtained outside of Spain and 93% of the company’s institutional investors are international. Last year, it generated 32% of its business in the United States.
