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NATURGY: TAKEOVER BID FOR 22.68% OF CAPITAL (ANÁLISIS BANCO SABADELL)

Global InfraCo has announced it will launch a takeover bid for 22.689% of NGTY in cash at € 23.00/sh. over the coming days, meaning a +20% premium vs. yesterday’s close. The company’s deadline to launch the takeover bid ends on the 26th of February although it expects to have the documentation ready before this date.
 The bid is addressed at 100% of the shareholding structure, however both Rioja (20.7% NTGY; Rioja is Alba and CVC) and GIP (20,6% NTGY) have pledged not to accept the offer. In this regard, the takeover bid would be addressed at the remaining shareholders (La Caixa 20.4%, F. Godia 5%, Sonatrach 4%, Capital Research 3%) and free float (~26% capital), and in the event of acceptance, a prorated calculation will be applied.
 The bid will be subject to a minimum acceptance of 17%.
MARKET IMPACT
Positive news for shareholders being targeted by the offer, and we would recommend accepting the bid when it is made over the next few days. Considering that 41.3% of the capital will not accept (and therefore orders of up to 64% of shareholders requesting will be accepted), the average prorated premium would be +13%. If we were also to assume that Criteria will not accept, either (it only sold 10% in September’16 to GIP), the premium would reach +17%.
We understand that this move, performed in agreement with GlobalInfraCo, Rioja and GIP, seeks to create a robust syndicate of shareholders after the TOB is made to capitalise on NTGY’s value through divestitures. We recall that both Rioja and GIP entered the shareholding structure at levels of €~19/sh., which would be in line with the current share price. Thus, although based on the company’s fundamentals our recommendation is SELL, following this offer, we would not do so until the TOB is launched, when the value offered will be maximised. Until then, we place our recommendation Under Revision.