The Hungarian group Magyar Vagon formalizes its takeover bid for Talgo for 619 million euros

Talgo will pay you 3 million euros if there is a competing offer that goes ahead

The Hungarian group Ganz-Mavag (Magyar Vagon) has officially presented to the National Securities Market Commission (CNMV) a Public Offer for the Acquisition of shares (OPA) to acquire 100% of Talgo for 619 million euros.

The buyer highlights in its statement that the price of 5 euros per share represents a premium of 14.4% compared to the current price of the company's shares, 27.7% compared to the situation prior to when it transferred its interest in November and 41.4% compared to the average of the previous six months.

With this communication, Magyar Vagon undertakes to initiate the process of requesting authorization from the competent authorities "as soon as possible" after the publication of this announcement and in collaboration with said authorities.

The offer is conditional on the acceptance of at least 50% plus one share of Talgo's share capital, as well as the authorization of the European Commission and the Spanish Government, as it is a foreign investment.

In this sense, and after Óscar Puente has stated that the Government will try to stop this operation as Talgo is a strategic company for the country, the Hungarians highlight in a statement that they will request this approval "in collaboration with the competent authorities."

Magyar Vagon also confirms that it has been in confidential conversations since last December with the company's main shareholder, Trilantic (with 40% of the capital), and with Talgo itself, which gave its consent to share information with the buyer.

In fact, both parties have agreed on a clause that will oblige Talgo to pay 3 million euros to Magyar Vagon if the offer is authorized but ultimately does not succeed due to the presentation of a competing offer, as compensation for the costs and expenses incurred in the preparation of the takeover bid.

Furthermore, Talgo's board of directors has already declared that it is a friendly takeover bid and that it will collaborate with the Hungarians for its success, including to seek financing if any entity resolves its debts due to the change of control.

With all this, Pegasus Transportation International (Trilantic's industrial company) has already confirmed that its intention is to accept the offer with its entire participation, so the Hungarians have already secured 40% acceptance thanks to their close collaboration with the company and its main shareholders.

KEEP YOUR 'SPANISHNESS'

Although Talgo already knows about Magyar Vagon's proposal and its industrial plans, the company has sent a statement following the announcement in which it will demand that the buyer preserve employment and industrial capacity in Spain, maintain Talgo's headquarters and management. in the country, retain Talgo Patents ownership of intellectual property rights and patents and represent the best option for all shareholders and other interest groups.

On the other hand, the offeror, 55% owned by Ganz-Mavag and 45% owned by Corvinus - a Hungarian state fund - expresses in the document its intention for Talgo's shares to continue trading on the stock market, thus ruling out that its objective is to exclude it.

PRE-AGREEMENT WITH THE BANK

Yesterday, the Hungarians already managed to close a preliminary agreement with the bank in order to avoid the main obstacle that the CNMV placed in their first intention of presenting this operation at the beginning of February.

Specifically, he found a regulatory problem with it: that banks can cancel their loans with Talgo if the owner of the company changes. In the company's accounts there are 23 entities with credits of 329 million euros.

However, Ganz-Mavag, led by businessmen György Bacsa and András Tombor, has convinced the bank to continue betting on the Talgo project, even if it changes hands, which will be a precedent for the Government's decision. whether or not to veto this operation.

GOVERNMENT RESPONSE

For its part, the Government has assured that it will be "vigilant" over this takeover bid, in order to guarantee the future stability of the company.

Sources from the Executive have expressed to Europa Press this first reaction to the formalization of the offer, thus lowering the tone expressed privately on Wednesday by the Minister of Transport, Óscar Puente, who assured that the Government will do "everything possible" to stop this operation.

"We have a framework reinforced last year for the analysis and control of investments, guaranteeing that operations do not affect Spain's interests in matters of health, security and public order, and that seeks to maintain balance to remain attractive as an investment destination. ", they now point out from the Government.

In this way, Pedro Sánchez's Executive defends that he will analyze all the details of the Talgo operation, highlighting that it is a company "that operates in a strategic sector with a fundamental role in railway mobility."

"We are always going to defend strategic industrial projects and jobs," say the same sources, regarding the future role it will have in the authorization of this takeover bid, leaving the door open to both its possible approval and its denial.