TheChek News Flow

The tide appears to be starting to turn for Atlantia [BIT:ATL] in its takeover battle with Hochtief [FRA:HOT] for Spanish infrastructure company Abertis [BME:ABE], said four sources familiar with the situation.

The Italian toll-roads operator’s unsolicited bid for Abertis has run into choppy waters as two Spanish ministers have publicly flagged concerns about the deal, as reported. The government has been split on how to handle the issue, with the interventionists appearing to hold the upper hand, this news service reported in December.

The political pressure appears to have lessened in recent weeks, said the first source. Atlantia’s camp feels like it is winning the argument that it would be unfair to block its offer, said the source.

A local newspaper reported earlier today (Thursday) that the Council of Ministers could approve one aspect of Atlantia’s bid (the transfer of toll roads) as early as tomorrow (Friday). However, a decision on the approval of Abertis’ 57% stake purchase in satellites company, Hispasat, which is a strategic business for the government, will remain pending.

Atlantia has been lobbying the liberal wing of the government in private, said a second source. The Italian company has been lobbying hard behind the scenes, said a Madrid-based banker who is following the situation.

Although it is too soon to say whether the liberal wing is gaining the upper hand over the interventionists, a recent decision by the National Securities Market Commission (CNMV) could indicate that this could be the case, the second source said.

On 9 January, the CNMV maintained its decision to approve Atlantia’s offer document following public criticism from two ministers due to a technical mistake in the process. CNMV chairman Sebastian Abella will need political support if he seeks further administrative roles in the future, which means that the decision was "very brave," the second source said, adding that the government’s liberal wing will have provided him with cover against their interventionist colleagues.

Although Atlantia made a technical mistake by failing to apply for government approval at the same time the CNMV was studying its offer document, the fundamentals of the case remain in its favour, said the third source. There are no technical grounds to justify blocking the deal, this source said, adding that the interventionists will have to bite the bullet sooner or later.

The political situation remains extremely complex, said a fourth source, adding that despite the drama it is important not to overplay the risks. The situation is likely to turn into a standard auction by the time of the sealed envelopes round, the source said.

Both Atlantia and Hochtief’s bids for Atlantia run on the same timetable, with the next milestone being the start of the offer period after the CNMV approves Hochtief’s offer period. If neither side withdraws, both have the right to submit an improved offer in a sealed envelope at the end of the process, as reported.

The Italian company’s bid has friendly intentions, said a person familiar with its thinking. It would be a mistake to frame the situation as a battle between Atlantia and the government, this person added.

Situation resembles poker game

On 7 December, Spain’s Public Works Ministry (led by Iñigo de la Serna) and the Energy, Tourism and Digital Agenda Ministry (led by Álvaro Nadal) issued a joint statement saying that Atlantia should have solicited government approval for its offer, as reported.

Since then, de la Serna seems to be withdrawing from the interventionist camp, leaving Nadal by himself, the first source said. Some ministers have been quietly dropping their hardline stance, agreed the second source.

One way out of the political cul de sac would be for Nadal to find ways to save face, said the first source. Unfairly blocking the deal would have negative consequences for Spain within the European Union (EU), this source said.

At the moment, though, the situation resembles the mid-point of a poker game, the second source said. It is too early to say who is bluffing, this source said. Threats and bluffs are part of the game, said the fourth source as well.

The liberal wing of the government, led by Economy Minister Luis de Guindos, is making less noise in public, but it is acting as a counterweight to Nadal and the interventionists, said the second source. De Guindos is seeking a seat on the board of the European Central Bank (ECB), as reported.

Abertis’ 21.6% shareholder La Caixa has been taking a passive role in the political situation, said a fifth source familiar with the situation and a second banker. The banking foundation isn’t actively lobbying for a level playing field, said the fifth source, adding that the situation remains very likely to be resolved in the envelopes round.

La Caixa has a weaker position than it would like due to the Catalan situation, said the second Madrid-based banker. - "It can't stick its neck out," this banker said.

The foundation had to move its fiscal headquarters to Palma de Mallorca from Barcelona (the capital of Catalonia) in October as a regional push for independence came to a head. At the same time, its affiliate CaixaBank [BME:CABK] – formerly Catalonia’s largest bank – moved its headquarters to Valencia.

The Catalan situation has made the political situation messier than it otherwise would have been, said the fourth source. Abertis itself also moved its fiscal headquarters to Madrid from Barcelona in October.

The regional government of Catalonia – a rich region in northeastern Spain – made a symbolic declaration of independence in October after convoking an illegal referendum that was boycotted by unionist voters. The central government in Madrid responded by cancelling the region’s devolved powers and convoking new elections, while several separatist leaders were imprisoned. The separatist block won a majority although it lost the popular vote, and is trying to form a government, as reported.

Spokespeople for Atlantia, La Caixa and the Energy Ministry declined to comment.