Southeastern increases stake in Ferrovial

Southeastern Asset Management, which played a prominent role in ACS’ takeover of Hochtief earlier this year, has acquired an additional 2% of Ferrovial, making it the company’s second-largest shareholder.

US fund manager Southeastern Asset Management has bought an additional 2 percent of Spanish infrastructure group Ferrovial, taking its stake in the developer to 5.01 percent, according to a filing with the Spanish competition authority.

Southeastern is Ferrovial’s second-largest shareholder, owning 36.76 million shares in the developer – a stake which has a market value of just over €303 million. The family of Ferrovial chairman Rafael del Pino, which owns 45.57 percent of the Spanish developer, is the company’s largest shareholder.

Ferrovial swung back to profit during the first half of the year, recording €312 million of profits up from €164 million of losses during the first half of 2010. The company’s return to black was largely due to asset sales, especially the divestment of Swiss airport ground handling company Swissport for €695 million. However, earnings before interest, tax, depreciation and amortisation (EBITDA) fell 14.1 percent to €1.01 billion compared with the first half of 2010.

Southeastern hit the headlines earlier this year in connection with another large Spanish developer, ACS. It played a key role in helping the latter take over German infrastructure group Hochtief. The US fund manager, which at one point owned close to 5 percent of Hochtief, was angered by the German company’s decision to sell a 9.1 percent stake in the company to an investment vehicle of the Qatar government at a price it termed a “give away”.

At the time, some pundits saw Hochtief’s share sale to Qatar, conducted through a capital increase, as a move to hinder ACS’ takeover, since it had the effect of diluting the Spanish developer’s stake in the German company.

Whether or not this was Hochtief’s primary motive, the sale prompted Southeastern to commit to divest roughly half of its shareholding in Hochtief to ACS, giving a decisive boost to ACS’ objective of crossing a 30 percent shareholding in Hochtief. Under German law, ACS was allowed to pursue a controlling stake in Hochtief on the open market once it acquired 30 percent of Hochtief. 

Southeastern’s role in the takeover was so prominent that German financial watchdog BaFin investigated the US fund manager’s role in the takeover process, eventually ruling out that ACS and Southeastern had acted in concert. ACS now owns 50.16 percent of Hochtief.