Citi Infrastructure Partners has taken a step closer to taking control of Spanish toll road business Itinere after its proposed investment received acceptances for 91 percent of the share capital it had bid on.
Itinere deal: on
The infrastructure fund managed by Citi, and in which the bank is reported to have a 15 percent stake, now holds 47 percent of Itinere after buying out Spanish builder Sacyr Vallehermoso’s position in the company. The deal values Itinere at $2.87 billion.
According to a report by Reuters, Citi is expected to follow the purchase with that of a further 11 percent of the shares of Itinere over the coming few days. The bank has also purchased a separate 4 percent in addition, meaning that when all purchases are complete, it will hold a total of 62 percent of the share capital in the company.
In the deal with Sacyr, which was struck last year and given the green light by Spain’s public sector earlier this month , Citi also acquired the option to buy all of the toll road firm. As part of the deal, Citi agreed to assume €5 billion of Itinere’s debt.
In December Julie Ainouz, an analyst at Societe Generale, was reported by MarketWatch as saying that Citi was paying a relatively low price because Sacyr needed to make a quick sale.
“Despite tougher lending conditions, these various transactions show that investors are still interested in motorway concessions, but they also reveal pressure on transaction multiples in the sector,” she said.