Metrovacesa’s board of directors has rejected the takeover bid launched by FCC with the aim of achieving a 29% stake in the property developer’s capital, considering that the offered price of 7.2 euros is not adequate. As reported by the company to the National Securities Market Commission (CNMV), none of the directors holding Metrovacesa shares will accept the offer, although each shareholder will decide whether or not to attend the takeover bid, the acceptance period for which ends next June 14th.
The members of the board base themselves on the reports that they commissioned BofA Securities to analyze the operation from a financial point of view, which conclude in an unfavorable opinion of the offer, considering that “it does not adequately reflect the intrinsic value of the shares of Metrovacesa”.
This opinion is in line with that of other analysts, such as those of Banco Sabadell, who a few weeks ago recommended not accepting the offer, believing that the price was low: “We are not worried that there will be no improvement (in price), because we estimate that Metrovacesa can pay 680 million euros in dividends over the next four years, which is equivalent to 57% of the capitalization, so we are comfortable with the cash generation profile of the company alone”.
Among the shareholders with a presence on the board are Santander and BBVA, the first with 49% of the shares and the second with 21% of the total, who will not attend the offer either, as confirmed after a meeting of the board of directors that It took place this Monday. Specifically, Mariano Olmeda, Francisco Javier García-Carranza, Carlos Manzano and Ana Bolado Valle, proprietary directors representing the Santander Group, and Enrique Migoya and Cesáreo Rey-Baltar, from the BBVA Group, have expressed this decision. Between both entities they already add up to 70% of the shares, so all the rest of the shareholders would have to accept the offer to reach the objective set by FCC.
FCC Inmobiliaria does not give up sitting on the board
The developer’s board of directors has also specified in the statement sent to the market that this takeover bid “does not respond to any strategic initiative of Metrovacesa, nor has it been requested or sought in any way by the board of directors”. For its part, FCC Inmobiliaria, the subsidiary through which the company launched the offer, indicated in the takeover bid brochure that it will not give up being present on Metrovacesa’s management body once the takeover bid is completed, after the construction company controlled by Mexican tycoon Carlos Slim has not ruled out exercising, individually or with other shareholders, the right of proportional representation.
He knows in depth all the sides of the coin.
In any case, the company assured that it has no plans to promote changes in the structure, composition and operation of Metrovacesa’s administration, management and control bodies, and therefore it has no intention, initially, of proposing or requesting the appointment of representatives on its board of directors.
Similarly, as it is a stake of less than 30%, FCC considers this operation as an investment opportunity, without having the capacity to make changes to Metrovacesa’s activities, objectives, actions and strategy. In this sense, neither does it have plans to promote or propose modifications to its dividend policy, in the sense of distributing at least 80% of the free cash flow generation each year. FCC defends in the prospectus that the objective of this transaction is “to consolidate a solid and large-scale real estate group, with greater management efficiency derived from the operational and financial synergies that allow it to take advantage of the growth opportunities in the sector”, at the same time as diversify the risk and presence of FCC Inmobiliaria in the Spanish geography.