Siemens bid to buy Gamesa at €18.05 per share | comp

Siemens Energy Declare a bid to acquire 100% of Gamesa Spaniards were excluded from the listing, of which it already owns 67% of the capital. The offer is €18.05 per share, all in cash, up 7.8% from the price, which had already risen by 25% last week after the first information about a potential Siemens bid.

The offer is not conditional on any acceptance limit. Siemens Energy has announced the offer, a move after which it cannot back down, and is required to file a prospectus next month. The timing of the operation will, subsequently, depend on the permits of the CNMV itself and other authorities.

This announcement puts an end to months of speculation about the future of the company in particular Since leaving Iberdrola in 2020. So, Siemens has reached the current ratio of 67% with a payment of €20 per share, an increase of 8% from now. bad company results, losses of 780 million Last semester, they weighed on the stock, which this month hit its lowest level since June 2020 at €13.30, down 36% on the year. The stake amounted to 33 euros at the end of 2021. At a price of 18.05 euros, the operation estimates Siemens Gamasa at 12.294 million euros, bringing the disbursement of the 32.93% that it aspires to buy now to 4,048 million euros.

Siemens Energy confirmed last Monday that it was considering the offer, after information from Bloomberg that caused Gamesa to raise 12% before CNMV suspended it. The value continued to rise when trading resumed and the next day, with the market taking the operation for granted The cables are about a width between 18 and 19 euros. Already in January stock soared After information from Reuters also indicated a possible buying attempt. Some of the shareholders in the company such as the Union Investment Fund, They also asked for an offer of disqualification.

This month, the company announced a loss of 780 million euros in the first half. SG has suffered on its margins from project delays, which carry fines, rising costs for electricity and raw materials such as steel and copper, as well as supply chain disruptions. The company is also having problems developing its ground-based 5.X turbine model, which has a capacity of 6.6 megawatts, the largest in the industry.

However, the company plans to pass on costs at higher prices Got market approval. Jochen Eckholt took over as Siemens Gamesa CEO in March, replacing Andreas Nauen, who had been in the role for less than two years.

The price of the takeover offer, which CNMV must verify as fair, is based on the valuation report submitted by PwC as an independent expert, a step required by regulations if takeover offers are written off. The company highlights that it is paying a 27% premium to the price before the latest information on the takeover offer.

Siemens Gamesa aims to exclude the Spanish company from circulation. Although with the offer not reaching the 90% threshold needed for automatic disqualification (as the company necessarily buys shares that did not participate in the takeover bid), Siemens Energy’s intent is to issue a disqualification decision through a second path. If it reaches 75% of the share capital, the exclusion from the stock market will be approved at the shareholder meeting, a scenario in which the shareholders also have the option to sell the shares at the price of €18.05 mentioned above.

The operation was launched with the aim of integrating the business and saving costs, according to Siemens Energy. The integration will result in cost savings of up to 300 million euros per year, achievable in three years. Siemens is also anticipating revenue synergies, which it puts in “three figures by the end of the decade.” The objectives will be achieved through “a streamlined corporate structure, a unified strategy and integrated operations, greater adaptability in a highly dynamic environment, and greater access to finance.”

The company did not specify its plans for activities located in Spain: “Spain will continue to play an important role in the activities of the group. The success of the transaction will provide competitive working conditions for current and future employees.”

The company has signed financing with Bank of America and JP Morgan, but plans to fund the purchase with equity, as part of its commitment to an investment grade rating. It is considering a capital increase with subscription rights to existing shareholders of 2,500 million euros. The rest of the process will be covered by debt or cash.