He soap opera Magyar Vagon’s takeover bid for Talgo is coming to an end. After a meeting held expressly on Monday, the Executive decided to terminate the operation, which will force the railway manufacturer to seek another investment or another industrial partner This allows it to have sufficient industrial capacity and to be able to cover current orders.
The decision was taken in Foreign Investment Council (Jinvex), inter-ministerial collegiate body responsible for analyzing these operations, based on information provided by the relevant ministries and organizations. This is a meeting, as this newspaper learned from close sources, which It was called unexpectedly on Monday and was held electronically..
The reasons why the government vetoed the Hungarian takeover bid are that “it would entail risks for ensuring national security and public order,” according to the Ministry of Economy, Trade and Business, which also refers to the “protection of Spain’s strategic interests“.
However, there are no further details. The Council of Ministers stated this information as “classified”However, even before the Jinvex ruling, the government had expressed its reservations through Minister Óscar Puente.
Among other things, They did not like Magyar Vagon’s links with the Hungarian executive at all.led by Viktor Orbanand its close relations with Vladimir Putin’s Russia, now an enemy of the European Union.
What seems clear is that the decision was hastygiven the way events unfolded on Tuesday. Jivex’s decision was disclosed to the public in the morning, forcing the National Financial Markets Commission (CNMV) to suspend his contribution.
At the same time, Pilar Alegría, in the press conference following the Council of Ministers, acknowledged that the issue of Magyar Vagon’s takeover bid for Talgo had been discussed during the ministerial conclave, but refused to talk about it.
However, just minutes after Alegría’s speech ended, the Ministry of Economy issued a statement (which also ended up in the hands of the CNMV) to, officially, confirm the blocking of the public purchase offer by the Government.
This allowed Talgo to return to trading, resulting in a cAida of its shares by 8.26%. Thus, everything seems to indicate that the chapter of the takeover of Magyar Vagon is coming to an end… although the courts may reopen it.
Talgo train.
Europe Press
Magyr Vagon, after being informed of the Government’s decision, states that it will take “all legal actions at your disposal“, both in Spain and in the European Union, to defend its public takeover bid for Talgo. An operation that the consortium claims is legitimate, because it complies with “all the legal requirements in force”.
The Spanish Association of Minority Shareholders in Listed Companies (AEMEC) has also announced its intention to take legal action over the situation.
And what does Talgo think about it? The railway manufacturer assures that “it will make its own decisions”among which legal remedies are not excluded either.
Whether or not the takeover bid can be resumed (through legal means), Talgo still has a major problem to solve. After the frustration of the purchase by Magyar Vagon, needs an industrial partner that will enable it to increase its production capacity and be able to fulfil train orders of its clients, including Renfe and the German public operator Deutsche Bahn.
Skodawhich had made a merger offer, is still there. It would fulfil this role and is the government’s preferred option. However, His proposal was rejected by Talgo’s board of directors and he lacks investment partners.
Moncloa tried to mobilize Caixa Criteria for this, but for now the holding The investor excludes participation if he does not have financial support from the government when entering Talgo.
All this at a critical moment in the commercial relationship between the railway manufacturer and Renfe due to the malfunction of the recently delivered Avril trains, which are causing many problems on the railway network.
A situation which led the public operator to demand the dismissal of Javier Fernández Sánchez del PeralCEO of Tarvia, a company in which Talgo is the majority shareholder and which is responsible for maintaining the new Avrils.
Market Vision
The government’s refusal did not come as a surprise to investors. As pointed out Joaquin RoblesAccording to the XTB analyst, “the decision to reject the takeover bid of the Hungarian group Magyar Vagon was something that was expected, since the executive had expressed its intention to do so in the past.” And this “even though this operation could have been the most beneficial for the Spanish company.”
The same expert recalls that “in recent months, the government has been looking for buyers or investors who could enter Talgo, speculating on the possibility of an entry through Criteria or the State Public Investment Company (SEPI).”
With the No Following the Foreign Investment Board’s response to the Hungarian group’s takeover bid, Talgo shares closed Tuesday’s session at 3.945 euros, down 8.26%.
In the short term, XTB analysts They do not expect “big price movements, because at the moment, a takeover bid by a larger company that could help Talgo solve its capacity problems is not being considered.”
“The entry of a new investor could put an end to speculation about its shareholding, but not to the structural problems of the company,” they add.
