Arcus Infrastructure Partners (Arcus), the London-based infrastructure fund manager, and Jose de Mello, the largest shareholder in toll road operator Brisa, teamed up last week to launch a takeover offer for the Portuguese firm.
The two partners set up a joint venture called Tagus Holding – 55 percent-owned by Jose de Mello and 45 percent-owned by Arcus – to conduct the takeover. Together, the partners already own 49.57 percent of Brisa and 53.81 percent of the company’s voting rights.
Arcus and Jose de Mello are offering Brisa’s other shareholders €2.66 per share to acquire the rest of the company they don’t already own. The takeover will cost the two partners some €700 million, two-thirds of which will be financed with debt from Portuguese banks Banco Comercial Portugues, Banco Espirito Santo and CaixaBI. Arcus owns 19 percent of Brisa whilst Jose de Mello holds just over 30 percent of the company.
Tagus Holding’s takeover bid for Brisa represents a 13.38 percent premium over Brisa’s share price prior to the offer’s announcement and an 8.64 percent premium in relation to Brisa’s average share price over the last six months.
The general analyst consensus is that the offer is priced low, but, as Vasco de Mello, Brisa’s chairman and chief executive of Jose de Mello said when the takeover was announced, the two partners already control Brisa. He also added there is no margin to increase the offer’s price.
That may be a problem for Spanish developer Abertis, which owns over 15 percent of Brisa, and which was widely seen, over the years, as a potential candidate to take over the Portuguese firm.
A source close to Abertis said the takeover bid’s price is “in line with Brisa’s current share price, but does not correspond to the company’s real value,” which could be taken as a hint that Abertis may push for better terms.
However, the source added that Abertis “is not thinking about a counter [takeover] offer”. De Mello told journalists at the takeover’s announcement that “if Abertis does not want to sell at this price it is welcome to keep its stake [in Brisa]”.
Brisa’s share price – like many other Portuguese stocks following the crisis – has taken a beating, decreasing sharply from a high of just over €10 per share in 2007. Over the course of last year, the company saw half its share price wiped out. The two partners have stated clearly that the takeover offer is intended to save Brisa from this downward spiral, with a possible de-listing in sight if the offer is taken up by enough shareholders.
The takeover offer expires this week. Other significant shareholders in Brisa include The State of New Jersey Pension Fund (2 percent) and Norges Bank (2.01 percent), the Norwegian central bank.