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OHL: ABANDONS EXCLUSIVITY AGREEMENT WITH CAABSA - MERGER EXPECTATIONS COOL (ANÁLISIS BANCO SABADELL)

The company has just announced that it has agreed with Caabsa to finalise the period of exclusivity established by the two companies to study the possible merger between OHL and Caabsa’s construction business. The company has confirmed, however, that Grupo Villar Mir (30.6% stake in OHL) is in talks with the Amodio famliy (100% stake in Caabsa) to sell to the latter of part of its share package in OHL.
We recall that the deal planned included the integration of Caabsa’s construction business in OHL via a merger through absorption, which would have given the Mexican company a stake of between 31% and 35% in OHL. Moreover, Caabsa would make a contribution of € 50 M (~31% of OHL’s market cap) in cash.
This news confirms the rumours echoed by the press in the past few days and should not be a surprise considering the exceptional situation caused by Covid-19. We understand that OHL’s priority is to optimise its liquidity position (€ 55 M of net cash and €~850 M of cash BS(e)) and to minimise the impact from Covid-19 on its business. In any case, we would welcome the sale of Villar Mir’s share package, as this would generate cash (€~50 M at the current price) that would allow Grupo Villar Mir to honour its debts, of which €~120 M would correspond to OHL (Pacadar’s debt).