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Spanish group mulls launching bid for Abertis

Source: Reuters - Tue 6th Jul 2010

Major shareholders in Spain's Abertis are exploring with Luxembourg-based private equity firm CVC Partners a buyout of the infrastructure operator, the firms involved said on Monday.

Criteria and ACS, which together control over half of Abertis, said they might sell a large chunk of their stakes to a three-way investment vehicle with CVC, in a move which could give them quick cash for other projects.

"The new vehicle would buy a substantial part of Criteria and ACS' stakes in Abertis and launch a bid for the Abertis shares at the same price paid for their stakes" Criteria said in a statement.

Criteria, the investment vehicle of Spanish savings bank La Caixa, and builder ACS have long been rumored to be seeking to extract value from their stakes in Abertis, which runs major Spanish toll highways, along with parking garages and airport concessions.

ACS has an ongoing plan to raise its stake in power utility Iberdrola to 20 percent from the 12 percent it currently controls, which would cost the company over 2 billion euros at current prices.

Although an investment vehicle with over 30 percent of Abertis would have to launch a full bid for the company by Spanish stockmarket rules, a Criteria source said the company wants to be the largest shareholder of a listed Abertis.

"(In order to keep Abertis listed) we could keep some of our stakes or convince other shareholders not to subscribe to the offer ... No way do we want Abertis to be delisted" the source told Reuters.

Trading in Abertis shares was suspended on Monday after they rose 12 percent on an unconfirmed Financial Times report that the pending deal values Abertis at 25 billion euros plus debt, about 2 billion euros more than on paper.

Shares in Criteria, which has 28 percent of Abertis, were little affected by the news, while ACS, which holds about 26 percent, saw its shares move sharply higher.

"The market seems to be discounting that ACS is going to get some cash in promptly for its stake," Capital Markets equity strategist Flemming Barton said.

Spain's infrastructure sector was hit hard in a deep recession, but Abertis' diversified holding and regulated toll revenues have helped it weather the downturn.

The company runs the AP7 toll road that runs down Spain's Mediterranean coast. About half of the company's revenue comes from operations outside Spain.

ACS has been rumored to be seeking a buyer for its stake for some time to finance its plan to raise its stake in power utility Iberdrola to 20 percent from the 12 percent it currently controls.

The generous valuation for Abertis also pushed up other European infrastructure groups like Italian peer Atlantia, in which Abertis holds a 6.7 percent stake.

The deal would be financed by an 8 billion euro club loan led by Italian investment bank Mediobanca, the FT said. Mediobanca declined to comment.

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