GIP bids €1.9bn for Italian high-speed rail firm

Global Infrastructure Partners has made a binding €1.9 billion equity offer for Italian high-speed rail group Italo just days before the group was set to be listed on the Italian Stock Exchange.

The offer, coming from the firm’s record-breaking third fund, has prompted a board of directors meeting at Italo later today (6^th February), with GIP’s offer set to expire at 5pm local time tomorrow. Italo had expected between 35 percent and 40 percent of its shares to be listed on Italy’s Mercato Telematico Azionario market by the end of the week following confirmation last month of its intention to list.

The proposal comprises an offer for the entire share capital of Italo, although it also allows the vendors to reinvest up to a maximum of 25 percent of the proceeds on the same terms. The bid also grants a put option for 50 percent of this potential reinvestment to be sold after three years and the remainder after five years, based on conditions previously agreed with GIP.

Italo was created as Italy’s first private high-speed rail operator in 2006 by businessmen Diego Della Valle, Gianni Punzo, Giuseppe Sciarrone and ex-Ferrari chairman Luca di Montezemolo, who GIP intends to retain in his current role as chairman. GIP also intends to keep current chief executive Flavio Cattaneo in his role.

Italo began operating services in 2012 and in 2017 saw a 15.3 percent increase in passengers to 12.8 million. The group ended last year with an EBITDA of €155.7 million and a net profit of €33.8 million.

Italo would be the first non-energy investment by GIP III, following deals for Equis Energy, Medallion Gathering and Processing, Borkum Riffgrund 2 offshore wind farm and Gas Natural.