Ferrovial makes A$1bn takeover bid for Australia’s Transfield
Spanish infrastructure group Ferrovial has made a A$1bn (US$877m) takeover bid for Transfield Services, the outsourcing and construction services company that runs Australia’s offshore immigration detention centres.
The offer comes just a week after the Madrid-based group agreed two big airports deals in the UK and Spain, signalling a broader revival in Spain’s corporate sector.
Transfield advised shareholders on Monday to take no action with regard to the A$1.95 per share cash offer from Ferrovial, which it said undervalued the company.
“The board of Transfield Services has considered Ferrovial’s proposal with the company’s advisers and has formed the view that the price of $1.95 per share does not reflect the underlying value of Transfield Services shares,” said Diane Smith-Gander, Transfield Services chairman.
However, Transfield said it would engage in “exploratory discussions” with Ferrovial to see whether the company would put forward a better proposal.
The bid is the latest example of increasing foreign interest in Australia’s fast-growing infrastructure sector, in which earlier this year Spanish group ACS seized control of Leighton Holdings.
Canberra is preparing to privatise up to A$100bn in assets as part of a government push to build tens of billions of dollars in new motorways, rail, airports, schools and hospital projects to boost growth.
The $1.95 per share cash offer, less the value of any dividends or other distributions, represents a 30 per cent premium over Transfield’s closing share price on Friday. The stock surged 26.7 per cent on Monday to close at A$1.90, after rising as high as A$1.97.
Transfield is one of the biggest outsourcing and infrastructure development companies in Australia with operations in Australia, New Zealand and the Americas. Earlier this year it won a A$1.2bn contract to run Australia’s asylum seeker detention facilities on Manus Island, Papua New Guinea, and Nauru.
The company said on Monday that it experienced strong trading in the first quarter to September 30, and would update shareholders on the outlook for the current financial year at its annual meeting on November 5.
Ferrovial is in expansion mode following two recent significant transactions. Last week it teamed up with Macquarie of Australia to take over Glasgow, Aberdeen and Southampton airports in a deal that valued the three facilities at £1.05bn including debt.
The group was also revealed as one of the new core investors in Aena, Spain’s national airports operator. Aena is due to be floated on the stock exchange next month. Ferrovial has committed to buying 6.5 per cent of the privatised group.
The Spanish group already has a presence in Australia. In February it was named the preferred bidder for a motorway contract in New South Wales.
Australian media have reported that the group recently pulled out of a bidding contest for John Holland, a subsidiary of the Australian construction company Leighton Holdings.