Carlos Slim’s plans to acquire FCC in Spain

Carlos Slim’s plans to acquire FCC in Spain

Mexican billionaire Carlos Slim has stated his intention to completely take over Barcelona based Spanish building and infrastructure company FCC.

Slim, the fourth richest man in the world, is making the deal through his company Inversora Carso. It recently increased its share in FCC from 27.4 per cent to 36.6 per cent by buying into a €709.5 million euro rights issue. Following this, it announced it was going for the whole lot.

Once the stake had been increased, the latest move was made inevitable under Spanish law. This states that once a shareholder has taken over 30 per cent of a company, it must launch an offer for a full take over.

In a statement to the Madrid stock market regulator, it was revealed that the Inversora’s offer of €7.60 per share is 15 per cent above the asking price of €6.59 per share.

 

NOT YET CLEAR CUT

Despite Inversora Carso’s intentions, the issue is far from cut and dried. Despite its offer to buy at a premium, some of its target shareholders may not be willing to sell at a loss as they bought their shares at a higher price than €7.60. There is the danger that this could lead to a rejection of the bid in some quarters.

However, this may not bother Slim’s holding company too much. The second highest shareholder and daughter of the founder, Esther Koplowitz, recently reduced her share of FCC to near the 15 per cent mark. This decision would essentially make Slim, at 36.6 percent, a controlling shareholder.

Because of this powerful position, he can build up his stake in a more leisurely manner in the future without having to make a fresh all out bid for the company.

 

FCC’S FINANCIAL TROUBLES

In 2007, FCC, founded by Ernesto Koplowitz, enjoyed a share price high of more than €61. However, it was hugely harmed by the crash of 2007 and in the past year its price has been as low as €5.52.

The price Slim paid for his initial stake in the company averages out at €9.75 per share. He has been able to target the company at a knock down price as it has struggled with high debts and slow business, especially in the period after the burst of the property bubble.

Two years ago the shares were worth €16 each. They were hovering around the €12 mark when Slim’s company made its first investment at the end of 2014.

FCC currently has over 57,000 employees.

For further information on investing in Spain, contact corporate law firm Argali Abogados.

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