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Atlantia taps pool of banks to finance Abertis' takeover bid: sources

[April 27, 2017] By Pamela Barbaglia

LONDON (Reuters) - Italian toll-road operator Atlantia has tapped banks to finance an upcoming cash-and-share bid for Spanish rival Abertis, sources told Reuters, as it seeks to create an industry giant with a market value of more than 35 billion euros ($38 billion).

Atlantia said last week it was interested in reaching an agreement to acquire Abertis, but the Spanish infrastructure group's Chief Financial Officer Jose Aljaro said on Wednesday that it had not yet received any concrete bids.

Atlantia's advisers Credit Suisse and Mediobanca and Abertis' adviser Citi have committed to provide financing for the transaction with a formal bid expected to be announced as soon as next week, the sources said.

The pool of financing banks will also include Italian lenders UniCredit and Intesa Sanpaolo and France's BNP Paribas, the sources said.

The overall financing package is estimated to be worth more than 10 billion euros, two of the sources said, with one adding it could involve a consortium of about ten banks.

Spain's Santander and France's Credit Agricole are also expected to take part in the financing, the sources said.

Atlantia, which operates Rome's two airports and around 5,000 kms of toll motorways, is set to hold a board meeting on Thursday and may give the green light to a formal bid for Abertis, another source said, cautioning no deal was certain.

Spokesmen at Abertis, Mediobanca, UniCredit, Intesa, BNP Paribas, Credit Suisse and Santander declined to comment while Atlantia, Citi and Credit Agricole were not immediately available.

EUROPEAN CHAMPION

A tie-up between Abertis and Atlantia, which is 30-percent controlled by the Benetton family, would create one of the biggest infrastructure groups in Europe, generating around 60 percent of its core profits outside Italy.

Atlantia has long been trying to lure its Spanish rival to the negotiating table, the sources said, in a bid to diversify away from Italy.

But Barcelona-based Abertis, a crown jewel of Catalonia, has only recently started contemplating the possibility of a sale to enable the business to cope with domestic challenges including a series of concessions that will soon expire, the sources said.

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The logo Spanish infrastructure company Abertis is seen outside his main office in Madrid, Spain, June 1, 2016. REUTERS/Sergio Perez

By 2021 Abertis will lose up to 1,000 kilometers of its toll roads in Spain, which run along the Mediterranean coast and around Seville, representing around 10 percent of the group's business.

The Spanish government has promised that these highways will be toll free when the concessions end between 2019 and 2021.

As a consequence, Abertis has increased its portfolio of foreign concessions over the past 12 months and reduced the weight of the Spanish business to around 20 per cent of its revenues and core earnings.

Atlantia's boss Giovanni Castellucci recently told a shareholder meeting in Rome that the deal would unlock "substantial growth" for the two companies, adding he was only interested in a friendly deal.

Rome-based Atlantia will also use the proceeds from a planned 15 percent stake sale in its Italian motorway business Autostrade per l'Italia (ASPI) [AUTSA.UL] to finance the Abertis deal, the sources said.

Analysts said it could pocket around 2 billion euros from the ASPI stake sale.

(Additional reporting by Francesca Landini in Milan, Stefano Bernabei in Rome and Robert Hetz and Andres Gonzalez in Madrid; Editing by Rachel Armstrong and Elaine Hardcastle)

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