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Siemens (59% SGRE) and Iberdrola (8.1% SGRE) have agreed to (i) acquire Iberdrola’s stake in SGRE (8%) at € 20.00/sh. (+27% vs. yesterday’s close; ~ € 1.1 Bn), (ii) terminate the shareholders agreement in force, (iii) cancel (by Iberdrola) the legal processes initiated against SGRE and (iv) sign a collaboration agreement. Additionally, Siemens announced it does not plan to launch a mandatory takeover bid for the rest of SGRE’s capital and as result of the termination of the shareholders agreement it expects to obtain € 100 M of annual savings in SGRE (13% of EBIT’21e) that would account for up to € ~900 M at present value (~10% of our valuation for SGRE before the deal). However, even assuming 100% of these savings, our T.P. would not exceed € ~14.00/sh. (€ 12.4 ex savings +1.3 on savings), and thus although we cannot rule out the possibility of a takeover bid (the Spanish market watchdog could still decide on this or Siemens could launch a voluntary takeover bid), we reiterate our SELL recommendation.
SIEMENS GAMESA: WE REITERATE SELL AFTER THE SALE OF IBERDROLA (ANÃLISIS BANCO SABADELL)
We reiterate SELL after the sale of IberdrolaSiemens (59% SGRE) and Iberdrola (8.1% SGRE) have agreed to (i) acquire Iberdrola’s stake in SGRE (8%) at € 20.00/sh. (+27% vs. yesterday’s close; ~ € 1.1 Bn), (ii) terminate the shareholders agreement in force, (iii) cancel (by Iberdrola) the legal processes initiated against SGRE and (iv) sign a collaboration agreement. Additionally, Siemens announced it does not plan to launch a mandatory takeover bid for the rest of SGRE’s capital and as result of the termination of the shareholders agreement it expects to obtain € 100 M of annual savings in SGRE (13% of EBIT’21e) that would account for up to € ~900 M at present value (~10% of our valuation for SGRE before the deal). However, even assuming 100% of these savings, our T.P. would not exceed € ~14.00/sh. (€ 12.4 ex savings +1.3 on savings), and thus although we cannot rule out the possibility of a takeover bid (the Spanish market watchdog could still decide on this or Siemens could launch a voluntary takeover bid), we reiterate our SELL recommendation.
Underlying
SIEMENS GAMESA (SGRE SM)
Provider
Sabadell
Alfredo del Cerro
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