The Hungarian investment group Ganz-Mavag Europe formally bid for 100% of Talgo’s shares yesterday. As announced, it is offering 5 euros for each share, which values the manufacturer at 619.3 million euros.
The takeover bid was submitted to the Spanish Securities and Exchange Commission (CNMV), the entity to which the Hungarian conglomerate requested authorisation to initiate this process a month ago.
Once the prospectus has been filed, the approval phase by several authorities begins. The first is the Council of Ministers of the Spanish Government. This is one of the biggest stumbling blocks, as the Spanish government has been against it, given the strategic nature of the manufacturer and the buyer’s links to Viktor Orban and Russia.
The Minister of Economy, Trade and Enterprise, Carlos Cuerpo, has confirmed that the government is studying the request and will defend Spain’s “strategic interests” in the operation.
In addition, the operation must be approved by the Danish Business Authority and the competition authorities of several countries such as Albania, Montenegro, Egypt and Saudi Arabia. All of them have relations with at least one of the two companies.
Talgo will increase industrial capacity if the takeover bid goes ahead
Magyar Vagon has highlighted its industrial capacity in Hungary, four times that of Talgo regarding the number of factories, and has expressed its intention to create a “very powerful” industrial and technological group under the Talgo brand. The unions have called for a viability plan to guarantee Talgo’s industrial future in Spain.
The bid is pending disclosure of which banks have agreed to back the Spanish bank in the takeover bid. The Hungarians have negotiated with 18 financial institutions with 227 million in liabilities.
Despite the government’s reluctance to do this operation, it has the participants’ approval of Pegaso Transportation, the company led by the British fund Trilantic, which owns most of the shares.
However, Trilantic is already negotiating with Stadler a possible counterbid in case the authorities veto the purchase. In addition, the government has opened the door for SEPI to acquire a stake in the manufacturer.
Ganz-Mavag’s business structure
The company that has submitted the bid to acquire the Spanish manufacturer is a subsidiary of a complex business network involving the Hungarian state fund Corvinus, András Tombor (a former senior government official) and Magyar Vagon.
In turn, as reported by elEconomista, Magyar Vagon is owned by Zsolt Hernadi, president of the largest Hungarian oil company, and Zsolt Komondi, former chief of staff of the Ministry of Development.
