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Spanish Motoring in the Contest for France's Toll Roads

Posted on: Tuesday, 22 November 2005, 12:00 CST

By Ross Tieman in Toulouse, The Business, London

Nov. 20--Spanish construction companies are leading the race for two of the three toll-road operators offered for sale by the French government in a E14bn (£9.51bn, $16.3bn) privatisation.

France's biggest toll-road company, Autoroutes du Sud de la France, looks certain to be driven in future by French builder Vinci, which owns 23 percent, and controls the fourth-largest player, Cofiroute.

But Cintra, a subsidiary of Spain's Ferrovial, is reported to have bid more than E60 a share for Groupe APRR, France's second-largest motorway operator.

The government has invited tenders for its 70.2 percent of APRR, which was floated a year ago through an issue of new shares to reduce its debts. Cintra's bid, including a premium for control, would cost it E4.6bn and represents a 44 percent increase over the E41.50 at which the shares were bought by institutions in November 2004. The shares were trading last week at E58.50, leaving 1.3m small investors sitting on a paper profit.

A Spanish toll-road operator, Abertis, which runs 1,534km of Spain's toll-roads, has also bid for APRR, as have Macquarie, in partnership with French construction group Eiffage, and Italian road operator Autostrade, teamed with the French state investment bank, Caisse des Deputs et Consignations.

Abertis is believed to have lodged the best offer for Sanef, which runs the roads leading south and east from Calais to Paris and Belgium. The Spanish operator is reportedly offering E55 a share, against a market price of E54.25, up from E41 at its flotation in March.

The Abertis offer values the government's residual 75.6 percent of Sanef at E3.76bn. But it also faces a rival bid from Cintra, and from a third Spanish construction group, Sacyr Vallehermoso.

All three Spanish companies appear to have bid for APRR and Sanef, leading consortia formed with financial partners. Cintra is supported by a Canadian fund, Borealis Funds Management, the investment arm of the Ontario Municipal Employees Retirement System, as well as by Teachers Private Capital, the private equity arm of the Ontario Teachers Pension Plan and the Caja Madrid savings bank.

Backers of Abertis include French insurers AXA, Predica and CNP, while Sacyr is reported to have an alliance with investment funds of France's Dassault aerospace family, as well as Italian insurer Generali and Sogecap, an insurance arm of French bank Societe Generale.

The new tactic deployed by the Paris to maximise proceeds from privatisations looks like yielding at least E14bn. But the French may have to get used to driving on Spanish roads.

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SCGLY, SCGLF, AXA, CS,

Source: Sunday Business

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