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Spanish Government opposes Magyar Vagon’s takeover bid for Talgo

Óscar Puente hace público que el Gobierno hará “todo lo posible” para evitar la operación ante las sospechas de la relación entre el comprador y el régimen ruso.

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The Spanish Minister of Transport, Óscar Puente, has announced the Spanish Government’s opposition to the takeover bid that the Hungarian group Magyar Vagon is preparing for the manufacturer Talgo.

According to Puente, the Government will do “everything possible” to prevent the company from falling into the hands of the conglomerate led by Hungarian businessman András Tombor.

The Government is concerned that Russian interests may be behind this offensive. Talgo has a market capitalisation of 527 million and a profit of 12.2 million in 2023. In recent years, it has won important contracts from European countries, such as DB’s ICE L and its sister cousins Talgo 230 from DSB.

The minister set out the Government’s position during his speech at the closing ceremony of the 2nd Intelligent Mobility and Sustainability Congress. Although the takeover bid application has not yet been formally filed with the Spanish Securities and Exchange Commission (CNMV), it is expected to do so shortly. Some media outlets have indicated that this operation is “imminent” for over a month.

The Government could veto the takeover bid for Talgo as the manufacturer is considered a strategic company

However, whether the takeover bid is launched will ultimately depend on the agreement the Hungarian group must reach with the banks with which Talgo has acquired debt.

This operation has raised suspicion in La Moncloa due to Magyar Vagon’s alleged links with Viktor Orbán’s Government and, by extension, with Russia. The Government can veto the deal, as Talgo’s rolling stock technology is considered strategic.

The so-called “anti-OPAS shield” from abroad is in force precisely until the end of the year. This is RD 571/2023 of 4 July on foreign investment, created to protect strategic companies in the current scenario.

Magyar Vagon values the Spanish manufacturer at 632 million euros (5 euros per share). Alongside Tombor, which was an advisor on national security matters during Prime Minister Viktor Orbán’s first term in office, the Hungarian sovereign wealth fund Corvinus supports the takeover bid.

The Spanish Government is also examining possible links between the Magyar Vagon-owned railway equipment manufacturer DJJ (Dunakeszi Jarmüjavító) and the Russian or Chinese capital. Tombor bought DJJ from Russian hands in 2020 during the invasion of Ukraine.

Possible candidates to acquire Talgo?

The maturity of the Pegaso International investment fund (which Trilantic, Torreal, and the company’s management team participated in), Trilantic’s decision to sell, and the dragging clause on the other participants have put Talgo up for sale.

When the stock market media announced this scenario, CAF, Stadler or a venture capital investment fund emerged as possible buyers.

Although Talgo’s business would complement that of the other two manufacturers, neither of them has made a public statement on this possibility at the moment.

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