Citi completes ‘extremely complex’ €2.9bn Itinere deal(4)

Citi Infrastructure Partners, the $3.4 billion infrastructure fund managed by Citi Infrastructure Investors, has completed its acquisition of a control position in Spanish toll road operator Itinere Infraestructuras for approximately €2.9 billion.

The deal, a landmark acquisition meant to give Citi a platform for acquisitions in the toll road sector, was executed through a public tender offer. Citi offered €3.96 per share for 100 percent of Itinere's shares. Shareholders eventually handed over 51.1 percent of the firm's shares to Citi in exchange for €2.873 billion in total. 

Citi is structuring the transaction so the portfolio of assets under its control will consist of seven “mature, resilient toll roads that form part of the national highway network in the northern regions of Spain”, the firm said in a statement.

To achieve this goal, Citi said it has completed the sale of all but one of the assets it does not want to Sacyr Vallehermoso, the Spanish construction firm that originally owned 80 percent of Itinere. Other toll road assets were sold to Spanish infrastructure developer Abertis and Italian motorway manager Atlantia.

Itinere's €5 billion of debt obligations is being transferred with the assets. Citi will assume approximately €3 billion of that debt.

The asset sales allow Citi to acquire an additional 11.58 percent stake in the firm from Sacyr, which now owns approximately 43 percent of the shares. The remainder is owned by Spanish savings bank Bilbao Bizkaia Kutxa (BBK).

Earlier this month, the Comisión Nacional del Mercado de Valores (CNMV), Spain’s securities market regulator, approved the deal on the condition that 46.02 percent of Itinere’s shareholders accept the offer. That hurdle was cleared when Sacyr, BBK and another, smaller shareholder tendered enough shares to accept the offer.

Citi said the execution of the Itinere transaction was “extremely complex” and represents a “powerful demonstration” of the firm’s deal execution capability.

Citi also said it will retain Itinere’s executive management and business development team, which will form its platform for toll road investments in OECD-member countries.

Last year, in a similar move, Citi acquired a 50 percent interest in airport manager YVR Airport Services as a platform for transactions in the airport sector. Together with YVR, Citi went on to bid for two airport assets: Chicago’s Midway Airport and Gatwick Airport in London.

Fidel Andueza, a partner at Citi Infrastructure Investors, led the execution of the Itinere transaction.