European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

ACS, Actividades de Construcción y Servicios / Event-Driven

ACS, Actividades de Construcción y Servicios (ACS SM)

ACS, Actividades de Construcción y Servicios

<ul>
<li>ACS is simplifying  its corporate structure: it has acquired the minorities in CIMIC, increased its stake in Hochtief and is buyer for any shares in Hochtief owned by Atlantia.</li>
<li>Thiess is now acquiring MACA and could also be a candidate for acquisition by the parent.</li>
<li>I see value in ACS. Further rationalisation in the holding structure would be a catalyst for the reduction of the discount.</li>
</ul>


ACS is simplifying  its corporate structure: it has acquired the minorities in CIMIC, increased its stake in Hochtief and is buyer for any shares in Hochtief owned by Atlantia.
Thiess is now acquiring MACA and could also be a candidate for acquisition by the parent.
I see value in ACS. Further rationalisation in the holding structure would be a catalyst for the reduction of the discount.


<ul>
<li>Thiess is launching an agreed offer to acquire 100% of <a href="https://www.smartkarma.com/entities/maca-ltd" target="_blank" data-smartkarma-citation="entities:11390:1" rel="noopener">MACA Ltd (MLD AU)</a> at AUD 1.025/share, in cash, cum dividend, a 28% premium, 2.8x EV/Fwd EBITDA. Minimum acceptance condition is 90%.</li>
<li>Thiess is gaining scale with the acquisition of MACA. I believe that in the future ACS/Hochtief/CIMIC will seek to acquire the whole of Thiess.</li>
<li>Gross spread (as of 29 July) is 2.43%, for a deal with high chances to complete. I would be long at this price.</li>
</ul>


Thiess is launching an agreed offer to acquire 100% of MACA Ltd (MLD AU) at AUD 1.025/share, in cash, cum dividend, a 28% premium, 2.8x EV/Fwd EBITDA. Minimum acceptance condition is 90%.
Thiess is gaining scale with the acquisition of MACA. I believe that in the future ACS/Hochtief/CIMIC will seek to acquire the whole of Thiess.
Gross spread (as of 29 July) is 2.43%, for a deal with high chances to complete. I would be long at this price.


<ul>
<li>GIP/Brookfield/ACS weigh launching a €15 billion unsolicited offer for Atlantia. Blackstone may partner with the Benettons to acquire Atlantia at €24/share (26% premium ). Italian Government's role will be key.</li>
<li>Atlantia trades at higher multiples than ACS (EV/22e EBITDA: 12.8x vs 3.2x, Capital IQ consensus). A hypothetical ACS/Abertis would become a world leader in infrastructure, but leverage is key. </li>
<li>The opposition of Edizione makes the operation difficult/more expensive. A joint-bid Edizione/Blackstone, would force the GIP-led group to present an improved offer. Nearly 50% of Atlantia's NAV is cash.</li>
</ul>


GIP/Brookfield/ACS weigh launching a €15 billion unsolicited offer for Atlantia. Blackstone may partner with the Benettons to acquire Atlantia at €24/share (26% premium ). Italian Government's role will be key.
Atlantia trades at higher multiples than ACS (EV/22e EBITDA: 12.8x vs 3.2x, Capital IQ consensus). A hypothetical ACS/Abertis would become a world leader in infrastructure, but leverage is key. 
The opposition of Edizione makes the operation difficult/more expensive. A joint-bid Edizione/Blackstone, would force the GIP-led group to present an improved offer. Nearly 50% of Atlantia's NAV is cash.


Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>On the 23 February, <a href="https://www.smartkarma.com/entities/acs-actividades-de-construccion-y-servicios" target="_blank" data-smartkarma-citation="entities:21242:1" rel="noopener">Actividades de Construcción y Servicios (ACS SM)</a>, via 52.3%-held <a href="https://www.smartkarma.com/entities/hochtief-ag" target="_blank" data-smartkarma-citation="entities:21652:1" rel="noopener">Hochtief AG (HOT GR)</a> offered $22/share for all <a href="https://www.smartkarma.com/entities/cimic-group-ltd" target="_blank" data-smartkarma-citation="entities:20030:1" rel="noopener">CIMIC (CIM AU)</a> shares it does not own. </li>
<li>The Independent Expert (Grant Thornton) has assessed the Offer and concluded it to be fair and reasonable.</li>
<li>The Offer is unconditional. The close of the Offer, unless extended, is the 11 April.</li>
</ul>


On the 23 February, Actividades de Construcción y Servicios (ACS SM), via 52.3%-held Hochtief AG (HOT GR) offered $22/share for all CIMIC (CIM AU) shares it does not own. 
The Independent Expert (Grant Thornton) has assessed the Offer and concluded it to be fair and reasonable.
The Offer is unconditional. The close of the Offer, unless extended, is the 11 April.


IE Says Fair And Reasonable In CIMIC's Target Statement

<ul>
<li>Hochtief offers A$22/share in cash, a 33% premium to the closing share price on the prior day, and the offer is final. The offer is a relatively low amount.</li>
<li>The deal should complete. The premium is generous, as the 15.4x P/22e E paid is high given that Hochtief and ACS are trading at 9.9x and 11.3x, respectively.</li>
<li>ACS trades at 27% discount to NAV. Holding structure rationalization and c. €5 billion received should be a catalyst for discount tightening. Long 1 ACS SM/short 0.4162 HOT GR.</li>
</ul>


Hochtief offers A$22/share in cash, a 33% premium to the closing share price on the prior day, and the offer is final. The offer is a relatively low amount.
The deal should complete. The premium is generous, as the 15.4x P/22e E paid is high given that Hochtief and ACS are trading at 9.9x and 11.3x, respectively.
ACS trades at 27% discount to NAV. Holding structure rationalization and c. €5 billion received should be a catalyst for discount tightening. Long 1 ACS SM/short 0.4162 HOT GR.


ACS/Hochtief/CIMIC: Rationalization of Holding Structure

Spain

ACS, Actividades de Construccion y Servicios, S.A. is an engineering and contracting company that develops civil and industrial infrastructures. The Company provides Civil Works Construction, Greenfield Concession Development, Industrial Services (electricity, oil and gas) and Environmental Services (waste treatment and facility management).

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ACS, Actividades de Construcción y Servicios (ACS SM)

Untangling ACS Holding Chain

Catalysts for the reduction of the discount would be increases in the Hochtief stake, direct ownership by ACS of the 50% of Abertis into the...

Jesus Rodriguez Aguilar

ACS/Thiess/MACA: Generous Premium

Thiess is offering AUD 1.025/share, in cash, cum dividend. The Board of MACA unanimously recommends accepting the offer in the absence of a...

Jesus Rodriguez Aguilar

Atlantia in Play?

The GIP/Brookfield/ACS deal seems a priori difficult, due to the size of Atlantia (for ACS) but above all because of the possibility that the...

Jesus Rodriguez Aguilar

IE Says Fair And Reasonable In CIMIC's Target Statement

This is done and trading to terms given Hochtief's right to exercise on-market purchases. Separately, Hochtief appears "cheap" relative to its...

David Blennerhassett

ACS/Hochtief/CIMIC: Rationalization of Holding Structure

The offer is well timed, as CIMIC shares had been trading at seven-year lows prior to the offer. Gross spread is nearly inexistent, but worth...

Jesus Rodriguez Aguilar

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