2024-02-08 19:38:57
The Talgo 230 model for the ICE L fleet of the German operator Deutsche Bahn.
Small, but cutting-edge due to its technology in the high-speed railway niche. This is Talgo, a company for which a possible dance of offers is expected once the Hungarian group Magyar Vagon crystallizes its purchase plan at 5 euros per share with a firm bid. In the market it is taken for granted that the public acquisition offer (takeover bid) will be for 100% of the capital, valuing the company at 632 million euros.
The National Securities Market Commission (CNMV) has Talgo suspended from trading since this Thursday. Around four in the afternoon, it put a stop to an increase in the trading floor that was 9.38%, up to 4.78 euros, in the heat of information from El Confidencial that spoke of an imminent step forward for Magyar Vagon. At Talgo they stood guard for hours, waiting for possible news from Hungary to, in turn, offer arguments to the CNMV about the rise in the price, but when the market closed there was no call. The Government also has no news about Magyar Vagon, according to a source close to La Moncloa.
Under the Magyar Vagon umbrella is the Hungarian train manufacturer DJJ (Dunakeszi Jarmüjavító). Some of its directors participated between October and November in preliminary contacts with the Talgo board. The approach was not hostile and came at a good time, since there are shareholders looking for a way out.
Analysts who closely follow Talgo’s price have speculated in recent weeks about the possible interest of the Basque company CAF, a direct competitor in the high-speed segment, but with a light train offer that Talgo lacks. A senior manager in the sector explains that attempts to create a Spanish railway champion with the integration of both have been repeated, and even encouraged by successive governments, but CAF has so far been reluctant to take the step.
Talgo’s other possible industrial girlfriend would be Stadler, a Swiss company with a strong presence in Spain through the Albuixech plant in Valencia. The latter lacks high-speed activity and has been reluctant to enter that niche. The company believes that high speed has a limited route due to the high cost of trains, greater electricity consumption than conventional rail and the need for dedicated infrastructure. However, those who follow Talgo’s developments on the floor do not rule out the participation of this player in a possible takeover battle.
Talgo acknowledged in November that it had received “a preliminary expression of potential interest in formulating a takeover bid for all of the company’s shares from a Hungarian business group at a price of 5 euros per share.” At first, silence was imposed on the author of the proposal, and DJJ’s interest was later revealed. The parent company has just appointed Ludvig László, former CEO of Siemens Mobility, CEO and has taken advantage of recent weeks to study Talgo’s accounts and assets in depth.
Exit shareholders
Talgo’s first shareholder is the venture capital fund Trilantic, which in 2006 opted for the firm with plants in Álava and Madrid. This investor has 63% of the instrumental Pegaso Transportation International, which in turn has 40% of Talgo’s share. Another 20% of Pegaso is in the hands of the founding Oriol family. And the rest is from the Torreal vehicle, owned by investor Juan Abelló. Pegaso’s partners have signed a drag clause by which a decision to divest Trilantic would take the other two investors with it.
Apart from Pegaso, the Torrente Blasco family owns 5.03% of Talgo through the Torreblas instrumentality, and the insurance company Santa Lucía lowered its package last February to 2.86%. Another 3.5% of the company is distributed among the board members.
At the end of the third quarter of 2023, Talgo improved its ebitda by 68%, to 64.5 million, with an increase in the operating margin to 13%, from 10.9% a year before. In the first nine months, revenue reached 470 million, 33.5% more. The order book, of 4.2 billion, is at its highest thanks to new awards of 1.9 billion.
The development of high speed in Spain has served as a springboard for a company that competes with European giants such as Alstom and Siemens. Talgo is currently in the process of delivering 30 very high-speed trains, known as Avril, to Renfe, an order that is accumulating delays due to the impact of the pandemic on the supply chain. In addition, the management says it sees opportunities worth 10,000 million.
Known worldwide after placing its trains on the Mecca-Medina line, in Saudi Arabia, another of the manufacturer’s efforts is to establish itself in the light train segment, which is being an arduous path. Where Talgo has taken decisive steps is in the offer of maintenance services, of which it collects four out of every ten euros.
DJJ joined Magyar Vagon in 2020. Behind is the Magyar businessman based in the United Kingdom András Tombor (52 years old), who would have participated directly in the conversations with the Spanish woman.
Tombor is the owner of the Czech aeronautical firm Aero Vodochody and acted, between 1998 and 2002, as an advisor on national security matters during the first term of current Prime Minister Viktor Orbán. The Hungarian investor also has a philanthropic profile, as the promoter of the Mathias Corvinus Collegium, to support talented young people.
The integration of Talgo would complement DJJ’s offering. Its variable width axle technology, capable of bridging the change between different track widths without stopping traffic, places the Spanish company at the forefront in the European market. The potential buyer has a factory in Dunakeszi (Hungary), where it produces passenger and freight trains, as well as trams and subways.
Change of hands due to the invasion of Ukraine
Investor András Tombor noticed an opportunity in the European bet on the railway, which encouraged the takeover of DJJ in 2020 from Russian hands. The acquisition occurred in the context of the invasion of Ukraine, thus the firm was no longer linked to Russian capital. DJJ is considered one of the main players in train manufacturing and maintenance in Eastern Europe.
Founded in 1911, it was important during the Second World War as a producer of war material, resuming railway activity in the 1950s. It became the property of the Canadian Bombardier at the beginning of this century. Today, the largest order in DJJ’s portfolio is for 700 wagons for the Egyptian Railways.
Follow all the information about Cinco Días in Facebook, X y Linkedinor nuestra newsletter Five Day Agenda
The Five Day Agenda
The most important economic quotes of the day, with the keys and context to understand their scope
Register for free to continue reading in Cinco Días
If you have an account in EL PAÍS, you can use it to identify yourself
Thanks for reading Cinco Días
_
#Talgo #heats #stock #market #face #takeover #drums #bidding #battle #Companies