The Hungarian consortium Ganz-MaVag, led by the Magyar Vagon railway group, intends to launch its takeover bid for Talgo at 5 euros per share this Thursday after the market closes, according to sources familiar with the operation. The Spanish company will be valued at around 630 million euros.
The offer on 100% of the capital will be presented to the CNMV despite the Government’s rejection and after an intense start to the week, in which the buyers have managed to close an agreement with Talgo’s creditor banks to guarantee financing despite the change of owners. Santander, BBVA and CaixaBank are part of the entities that granted 330 million to Talgo with a review clause in the event of a takeover bid.
The agreement with the banks gives Magyar Vagon arguments against the Government’s rejection, justified by the presence of Russian investors in the operation. Banking entities are especially sensitive to this issue given the ban on Russian capital, so their approval reduces the seriousness of the threat. At least, that’s how it is interpreted among potential buyers.
The Government has in its hand a legal instrument to stop the operation, which is the anti-takeover shield put in place during the pandemic, when the prices of Spanish companies put them within reach of a takeover. Reformulated in July of last year, it allows the Council of Ministers to veto the purchase of stakes greater than 10% in companies valued at more than 500 million and considered strategic. This power affects foreign investors, including community investors.
The Minister of Industry, Jordi Hereu, was the first to identify Talgo as strategic. The Minister of Transport and Sustainable Mobility, Óscar Puente, went further by assuring this Wednesday that the Government “will do everything possible” to prevent the Hungarian operation given the existence of foreign investors.
The takeover consortium is led by Magyar Vagon, owned by businessman András Tombor, linked to Hungarian President Viktor Orbán and whose rise has to do with the purchase of a train manufacturer, DJJ, from the Russian TMH. The Hungarian state fund Corvinus is also part of the consortium.
Talgo shares rose 1.4% on the stock market today, to 4.23 euros, still below the offer price. Several uncertainties weigh on Talgo, among them a possible claim by Renfe of 116 million euros for delays in the delivery of Avril trains for the high-speed link with Asturias. Other sources assure that the large contract with the German Deutsche Bahn is not going well at all.
Another factor that facilitates a takeover bid is that Talgo’s main shareholders want to sell. The largest of them is a consortium called Pegasus Transportation, which has 40% of the capital. It also has the American fund Trilantic as its first investor, which wants to make the move. The consortium also includes the Torreal family office, owned by Juan Abelló, and the founding family, the Oriols.
