One of the large Spanish construction companies, FCC, has resorted to a rare ingenuity to reward shareholders and increase the weight of the first of them, the Mexican magnate Carlos Slim: it will launch a public offering of shares (takeover bid) on its own capital. The objective is to buy own shares and redeem them later. Those who accept the offer will get a good bonus and those who do not, and Slim has already said that he will be among them, will gain relative weight over the capital.
The purchase of own shares is nothing new among the Ibex listed companies. Iberdrola, BBVA or Repsol do it to increase their treasury stock and play with securities. For example, they can give their shareholders the choice between receiving the dividend in cash or shares, or redeeming them directly so that, suddenly, there is less in circulation and, therefore, the price of each of them increases.
What is out of the norm is to buy back shares through a takeover bid. FCC will offer its shareholders 12.5 euros per share in cash, which represents a 38% premium compared to the day before the announcement. Since announcing the plan, at the end of June, the company has appreciated 30% on the stock market, reaching 5.5 billion euros.
According to the company, the operation will cost 400 million euros, but it has the money to face it. When communicating the takeover bid to the CNMV, it also explains that it will finance it with part of the 965 million euros obtained with the recent sale of 24.9% of FCC Medio Ambiente to the Canadian pension fund CPP. The proceeds from this sale “may be used” in the takeover bid, “without prejudice to being able to resort to external financing as necessary,” FCC states.
Is 12.5 euros per share a lot or a little? That is the dilemma of the shareholders who are invited to withdraw from the group. The consensus of analysts compiled by Bloomberg places the target price at 15.44 euros, above the offer price, although also at a distance from the current price. It is taken for granted that the group has potential.
One of the keys to the takeover lies in Slim, one of the richest men on the planet, with a fortune estimated at 92.5 billion dollars. In the middle of the last decade, FCC was rescued with an injection of more than 1.7 billion euros and, between takeover bids and agreements to reduce Esther Koplowitz’s debt, it has managed to reach 71.05% of the capital. Her relationship with Koplowitz is very good, as is evident at each shareholder meeting.
By holding the shares, the Mexican millionaire will gain weight in the capital in a percentage yet to be determined. What is not known is what Koplowitz herself, who retains 4.6%, will do, nor will the third of the group’s illustrious shareholders, Bill Gates, who has 5.7%, according to CNMV records. .
At the moment, the takeover bid has just been admitted for processing by the CNMV, so it is pending approval from the supervisor for its launch. FCC understands that approval from the CNMC is not necessary, as it does not affect competition, nor from the Government, as it is exempt from possible vetoes on foreign direct investments.
The takeover bid has also been an opportunity to learn how Slim’s presence in the company is structured. According to the authorization request document, three of the magnate’s subsidiaries have sent separate letters informing them that they will not accept the offer. They are CEC, Dominum and Finver Inversiones 2020.
Esther Koplowitz sits as vice president on the company’s board of directors, along with the president, her daughter Esther Alcocer Koplowitz, the result of her marriage to Alberto Alcocer. There are six members elected by CEC, including another daughter, Carmen Alcocer Koplowitz. Slim is a proprietary representative of CEC. Another position goes to the fourth Koplowitz: Alicia Alcocer Koplowitz.
FCC has just done some good numbers in the first semester. It obtained a profit of 256 million, 13% more than in the same period of 2022, after increasing income by 20%, to 4,319 million. The portfolio amounts to 41,463 million euros, 3% more than at the end of last year.
The business improves thanks to the increase in margins and also the good performance of activity areas such as Cement. Unlike other construction companies such as ACS or Ferrovial, 53% of their income comes from Spain.
