The markets do not expect IFM’s takeover bid for Naturgy to reach the 17% target

The markets do not expect IFM’s takeover bid for Naturgy to reach the 17% target

The Australian fund expects to reach between 17% and a maximum of 22.69% of Naturgy shares to have two chairs on its board.

Naturgy headquarters.

The cards are already cast. The deadline for the minority shareholders of naturgy accept the takeover bid from the australian fund IFM ends today, Friday, at midnight. The markets rule out that it will reach its objective 22.69% on the capital of the energy company and it remains up in the air if it will at least to a minimum of 17%, which would open the doors to having two directors.

It will not be known until a few days if IFM has achieved it or will have to settle for at least 10% and, if so, if it will finally decide to abandon its plan. He said a few months ago that if he cannot appoint two directors he will not join Naturgy, but this week he has changed his mind, acknowledging the vice president of IFM Investors, James Silesin a meeting with the press that his intention is to have a “proportional representation” in the council.

“The takeover bid will succeed but it is not known to what extent” market sources explain to EL ESPAÑOL-Invertia. “It seems that it is costing him to reach 17% because the premium is not very substantial, his war with dividends has not been very positive and the situation of the energy sector, with the government cuts, is very uncertain”.

“In addition, there is a social base in the retail shareholding that is closely linked to the company, shareholders who have been at Naturgy all their lives and who feel that it is a foreign fund that wants to take over it,” they add.


The war has focused on the distribution of dividends. Siles announced that they would be willing to give up eliminate profit sharing “if those are the circumstances facing the company.”

A statement that blew up the powder keg, because to Isidro Fainepresident of the La Caixa Banking Foundationsignificant shareholder of naturgy via CriteriaCaixais essential to maintain your commitment to Obra Social.

“If IFM wants to talk about a dividend cut, it leaves room to think if they are not thinking of something else to recover their investments and make them profitable for Australian pensioners,” explain the same market sources. “If they can’t do it via dividends, I wonder what else would there be, with the sale of assets?”

For Ángel Pérez, financial analyst at Renta 4, “by developing the energy company’s strategic plan without leading to a substantial increase in leverage, the dividend charged to 2021 and 2022 will be reduced”, which “leaves the door open to an additional review in 2023”. However, “a possible rotation of non-strategic assets could cushion this situation.”

stock market forecast

Another aspect that makes it difficult to see the success of at least 17% is the uncertainty that has been generated in the European energy sector with the possible changes in the regulation of the electricity market and in the geopolitical relations of gas.

“Naturgy shares on the stock market have remained stable while other energy companies, such as Iberdrola and Endesa, fell, a setback that they are already overcoming when the European decision to seek joint solutions to lower the electricity bill”.

“If IFM claimed that the value of Naturgy was artificially supported by the takeover bid, it is not understood that it will go ahead, if in its opinion, the value of the company is much lower.”

Bloomberg estimates that the average value of the share is 22.39 euros, although there are analysts who go up to 25 euros and others who lower it to 22.07 euros.

Regulatory uncertainty

It is the third factor to take into account. According to BofAthe impact on the income statements of the utilities Spanish companies due to the reduction in the remuneration of certain power plants will have very different consequences.

In the case of Naturgy, “we reiterate our purchase. Exposure to windfall taxes in Spain (including the gas tariff freeze) is relatively insignificant, in our view, and we remain neutral.”

Our target price is 27 euros per share based on an assessment of SoTP. We apply a discount for regulatory risk after the recent extraordinary tax proposals in Spain”.

For Rent 4, the recommendation is to sell to the market. “The effects as a result of the measures approved by the Government to reduce the price of the electricity bill are more limited in Naturgy than in its comparables”.

“At the Ebitda level, we expect an impact of 4% for 2021 and 3% for 2022 with respect to previous estimates. At the level of net profit, the estimated impact is 11% and 10% for each of the years, respectively, but we do not expect it to affect dividends, since 1.20 euro/share has been set against each of the the years and not a pay out about the results.”

An opinion shared by other analysis houses such as Mirabaud, Alantra and Sabadell, which modified their position towards selling. The last firm to reflect the doubts about the takeover bid was the firm JB Capital. In short, the majority option consulted by EL ESPAÑOL-Invertia is to maintain the Naturgy titles.

Ellsworth Weber