The Hungarian Ganz-Mavag consortium, in which partners such as the railway company Magyar Vagon and the oil company MOL participate, has informed the CNMV that it has made the formal decision to present a takeover bid for 100% of Talgo, once the authorization to the Government.
In the letter confirming the takeover bid of 5 euros per share, compared to the current price of 4.4 euros for the Spanish company, Ganz-Mavag explains that the decision to formulate the offer was actually approved unanimously by the board. of administration of the consortium on March 7. It was a day after the Minister of Transport, Óscar Puente, said that the Government will do "everything possible" to prevent it.
The bidders also confirm that on March 22 they asked the General Directorate of Investments of the Ministry of Industry for permission to buy the train manufacturer. They must also obtain permission from the European Commission and the competition bodies of other countries, including Saudi Arabia, where Talgo operates trains for the Spanish Medina-Mecca project.
To launch the operation, they have received legal advice in Spain from the Garrigues firm. They assure that they will present the necessary bank guarantees to demonstrate that they can afford the purchase.
With this step, a process begins that now requires the approval of the CNMV for the operation and that will be accompanied by the opening of a period for the possible presentation of competing offers. The Government's reluctance has fueled rumors about the possible search for another buyer, although the stock has remained stable.
The bidders take advantage of the fact that Talgo's first shareholder, which is a consortium led by the American fund Trilantic in which the founding family, the Oriols, participates, wants to sell. They argue that they will be able to provide the company with the capacity it lacks to deal with new orders, by transferring part of the workload to Hungary.
Talgo's board of directors is in favor of the Hungarian offer and has even offered to support Ganz-Mavag to resolve one of the problems of the operation: the risk that the banks will cancel loans to the company in accordance with the clause that recognizes this possibility in the event of a change of control.
A few weeks ago, the consortium reported that this aspect was the main uncertainty raised by the CNMV for the launch of the offer. There are Talgo loans for around 300 million euros with several entities, including Santander, BBVA and CaixaBank, whose conditions may vary if there is a takeover bid.
The Government can resort to the anti-takeover shield approved during the pandemic, when many Spanish listed companies were exposed to hostile buyers due to their low valuation. However, it wants to find a balance so as not to send a negative signal that discourages foreign investment, so it will "analyze all the details of the operation on Talgo", which "operates in a strategic sector" and which has "a fundamental role in rail mobility", according to the Executive.
As an additional element, there is the sanction to Talgo by Renfe for delaying the delivery of the Avril trains. Renfe has sent a letter to Talgo in which it informs it not only that it will implement the fine of 116 million euros but also that it will apply an additional penalty of 50 million euros for lost profits and another of 80,000 euros starting in April. for each day of delay.
