Sacyr launches EUR 6.5 bn full bid for Eiffage

Spain's Sacyr Vallehermoso, Eiffage's majority shareholder with a 33% stake, has unveiled plans to launch an all-share offer of EUR 6.5 bn for the remaining 67% stake in the French public works and transport concessions group, a day after it was denied seats on the company's board. Sacyr is offering 12 new shares for every five of Eiffage, valuing the company at around EUR 9.7 bn. This is slightly below Eiffage's capital value of EUR 10.38 bn at close of market on April 18.

In a press conference held in Paris on Thursday morning, Sacyr said that Eiffage will remain listed in Paris, while Sacyr will consider listing its own shares on Euronext Paris if its bid for Eiffage is successful. The bid will be financed through a share issue of about EUR 149 mln. Sacyr said the bid is conditional on getting at least 60% of Eiffage's voting rights. Shareholders can hand in their shares between May 9 and July 2, 200.

Sacyr resorted to a takeover bid after it failed Wednesday to reach five seats in an expanded board of 15 members. During the general annual meeting, Eiffage cancelled the voting rights of 89 Spanish shareholders, after accusing them of acting in concert with Sacyr. An Eiffage director told the Financial Times that 'if we had not annulled those votes, we would have been out of a job and Sacyr would control the company without having made a bid.'

Since acquiring an interest in the French group in 2005, Sacyr has been building up its stake to the current 33% which is valued at some EUR 3.4 bn. The company has been seeking more influence on Eiffage's board over the last twelve months. Eiffage's chief executive officer Jean Francois Roverato said Wednesday that the two companies are rivals in all areas. He added that in the event of a takeover, Eiffage would make a decision based solely on the value of the offer.

Sacyr's offer is at a 30.6% premium on Eiffage's one-month average share price as of March 20, 'the last non-affected price for Eiffage share,' Sacyr said. The combined group would have activities consisting of construction (60%), concessions (12%), property (11%), and services (6%). It would have registered sales of EUR 11.4 bn in construction alone, Sacyr added, becoming the fourth-largest developer in France.