End of soap opera. comes to an end with a bittersweet taste. The Australian fund must settle for only 10.83% of the capital of the Spanish company after achieving that low degree of acceptance of its offer. Thus, IFM becomes the company’s fourth largest shareholder after Criteria, which has 26.7%, and the CVC and GIP funds, with 20% each. You can only choose one advisor. At the close of the session, up to 24.01 euros, after announcing the outcome.
Initially IFM had proposed to acquire between a minimum of 17% and a maximum of 22.69% of Naturgy’s capital, and for this it offered 22.07 euros per share to interested shareholders. However, in the end he has waived that minimum acceptance limit. By way of breakdown, IFM’s offer has been accepted for 105 million shares -compared to the maximum of 220 million shares to which IFM aspired-, representative of that 10.83% of capital.
However, from the bottom they celebrate the result in their own way. Kyle Mangini, Global Director of Infrastructures at IFM Investors, assures that he is “very much looking forward to working closely with Naturgy’s shareholders so that the company implements its latest strategic plan, which implies helping to turn Naturgy into a key player in the energy transition”.
“Naturgy fits perfectly into IFM GIF’s strategy of investing long-term in critical assets with solid, recurring and regulated cash flows,” says Mangini.
In turns with the dividend
He also cites one of the latest controversies. The fund remembers that your entry makes you one of the main shareholders of the company. “As such, it will actively support Naturgy to help complete its long-term vision that is based on (…) a prudent dividend proposal, in line with the new dividend reduction policy included in the 2021-2025 Strategic Plan. , or even potentially a smaller dividend if necessary.”
And it is that, before knowing this result, Jaime Siles, vice president of the Australian fund IFM -en assured that they would not hesitate to eliminate the dividend if it was better for the company. Some statements that did not sit well at all within Naturgy. Moreover, not even 24 hours later, the Spanish had to step out to remember that there was and that any change required the approval of the council.
“Our stake in Naturgy is another example of how millions of pension fund members, through IFM, can access highly diversified investment strategies and asset classes on a scale that they would not be able to do alone,” says David Neal, director IFM delegate.
A business soap opera
The operation has been complex in its formulation and development. As Servimedia recalls, on the one hand, the reluctance of the main shareholders to facilitate the entry of the fund given its plans or strategy and, on the other, having to receive the government’s approval for being Naturgy a strategic company.
Thus, the offer was made by IFM after an agreement with CVC and GIP: While above 26%, while positioning itself against the fund’s decision to review the dividend policy and adjust it in Naturgy.
The authorization of the takeover bid came after the government’s approval of the operation, after IFM accepted all the conditions required by the Council of Ministers, such as maintaining the headquarters and a prudent dividend to continue with the investments and not undertake divestments other than those included in the Strategic Plan 2022-2025 nor exclude it from the stock market or lose control of the subsidiaries that ensure the transport and distribution of energy in Spain.
However, these conditions were set considering the threshold of 17% that had been set to consider the operation successful. As the final purchase is around 10%, IFM may have more margin when it exercises voting rights in the company… or not.