F2i in takeover bid for Italian water company

Italian infrastructure fund F2i has teamed up with local utility Iride for a takeover bid for Genoese water company MdA. Following the takeover, the partners will consolidate MdA and stakes in other water utilities in a special purpose vehicle, in which F2i plans to hold a share of up to 40%.

A consortium comprising Italian infrastructure fund F2i and local utility Iride are planning a takeover bid for Genoese water company Mediterranea delle Acque (MdA) as they seek to create a regional water powerhouse.

The plan is for F2i and Iride, which already owns 68.3 percent of MdA, to offer €3.00 per share to acquire Veolia Water’s 17.1 percent stake in MdA. Following the acquisition, the consortium would then offer the same price for the outstanding shares in the Genoese water utility sometime in June.

The offer price represents a 14 percent premium over last Friday’s closing price of €2.63. MdA’s shares were suspended on Monday, the day the consortium made its announcement, and are now trading at €2.95 per share, closer to the team’s offer price.

Assuming the takeover is successful, MdA would be delisted and incorporated into a special purpose vehicle called San Giacomo. Under the terms of the agreement, Iride would also place its shareholdings in two other Genoese water companies – Amtro (49 percent) and Idrotigullio (66.55 percent) – in San Giacomo.

F2i would then acquire between 33 percent and 40 percent of San Giacomo via a capital increase that, according to Reuters, could surpass €150 million, with F2i said to have the option of leaving the vehicle by 2016 via an initial public offer. However, F2i’s acquisition of a stake in San Giacomo is conditional on the successful acquisition of Veolia Water’s 17.1 percent stake in MdA, among other requisites.

Lazard and local firm Chiomenti Studio Legale are providing financial and legal advice respectively to F2i while Unicredit and Freshfields serve respectively as financial and legal advisors to Iride.