The Diplomat
Magyar Vagon yesterday filed an application with the Spanish Securities and Exchange Commission (CNMV) to acquire Talgo for 619 million euros, asking the government for express authorisation for the transaction.
According to a statement from the Hungarian company to the supervisor, on 22 March it applied to the Directorate General for International Trade and Investment of the Ministry of Industry, Trade and Tourism for authorisation from the Council of Ministers for foreign direct investment in Talgo, reports Europa Press.
The Government’s authorisation is a prerequisite for going ahead with the operation, in application of the anti-opposition shield it approved on the occasion of Covid-19, as well as Law 19/2003 on the legal regime governing the movement of capital and foreign economic transactions.
For the time being, the government has been reluctant to give the ‘green light’ to the takeover of a strategic Spanish company by Hungarian investors, citing possible Russian and right-wing extremist links.
Magyar Vagon has also sought the respective competition law approvals from the European Commission and the competition authorities of Albania, Kosovo, Montenegro, Serbia, Egypt and Saudi Arabia, as well as from the Danish Business Authority.
The Hungarians thus comply with the maximum period of 30 days from the formal submission of the takeover bid to the CNMV, which ended on Sunday, 7 April.
Magyar Vagon defended its operation claiming that the price of 5 euros per share offered represented a premium of 41.4% over the average Talgo share price during the six months prior to the presentation of the offer.
Magyar Vagon has been in confidential talks since last December with the company’s main shareholder, Trilantic (with 40% of the capital), and with Talgo itself, which gave its consent to share information with the buyer.
In fact, both parties agreed on a clause that will oblige Talgo to pay 3 million euros to Magyar Vagon if the bid is authorised but does not succeed due to the presentation of a competing bid, as compensation for the costs and expenses incurred in the preparation of the takeover bid.
Moreover, Talgo’s board of directors has already declared that this is a friendly takeover bid and that it will collaborate with the Hungarians for its success, even to seek financing if any entity resolves its credits due to the change of control.
Pegasus Transportation International (Trilantic’s industrial company) confirmed that it intends to accept the offer with its entire shareholding, so that the Hungarians would already secure a 40% acceptance rate thanks to their close cooperation with the company and its main shareholders.
