Skoda Transportation It is the long-awaited alternative that the Government was looking for to the Hungarian one Hungarian Wagon for Talgo. Although the interest shown by the Czech company in the Spanish company is not only generic but, according to financial sources, it would need fellow travellers to become a real alternative to the Hungarian takeover bid.
Talgo informed yesterday to the National Securities Market Commission (CNMV) that has received from Skoda proposes a “business combination and industrial integration”The Spanish woman explained that not contain an economic offerhas asked Skoda for detailed information on the proposal and, in particular, to indicate whether it involves offering its shareholders a higher consideration than that offered by GanzMavag Europe in the takeover bid announced on March 7 -which amounts to 619 million euros, at a rate of 5 euros per share- and whether this would be paid in cash. In addition, the company has asked it to explain its current industrial and financial capabilities.
On this point, financial sources point out that Skoda’s financial capacity is limited and that it would need a partner who could provide the financial muscle to face it. The Czech firm had a turnover of just over 1.1 billion euros last year and recorded losses of 78 million euros.
Among the possible partners being considered for Skoda, the following appears again: CriteriaCaixa, the Government’s preferred option to counter the Hungarian consortium. La Caixa’s holding company has not completely closed the door to the operation, but assures that its possible participation in the Talgo project “remains to be seen.”
Since GanzMavag, a consortium controlled by Magyar Vagon, announced its intention to take over Talgo, the government has been manoeuvring to find an alternative to the Hungarian offer in order to neutralise it. As the government has explained on several occasions, Minister of Transport, Oscar Puentethe Executive is suspicious of the Possible connections that the Hungarian company may have with Russia since some of its executives, starting with its visible head, Andras Tombor, have past ties with the Hungarian president Viktor Orban, a man close to Vladimir Putin.
In fact, the Government has pulled out the anti-OPA shield that it raised during the pandemic and is analyzing the possible veto of the operation. Overseas Investment Board (Jinvex) is currently preparing a report that will be used by the Council of Ministers to justify its decision, which, if contrary to the takeover bid, must be well argued and justified in order not to be rejected by the EU.
Option reactivated
Skoda was one of the options that had been considered in recent weeks as a possible alternative to Magyar Vagon for Talgo. Although weeks ago some sources assumed that the Skoda option had lost strength due to Criteria’s withdrawal from the operation, LA RAZÓN reported that the Czech alternative to counter the GanzMavag takeover bid was still very much alive and that talks between the two firms were ongoing.
GanzMavag itself tried to undermine Skoda’s chances a couple of weeks ago. At a meeting with the media in Madrid, Tombor said that “Skoda used to be a major player, but now the company is in losses and this does not make it a strong candidate to collaborate with. It is a fantastic brand, but It doesn’t come close to Talgo. I don’t see the value that it could bring in a collaboration with Talgo.“I think our offer is strong and makes sense, and I don’t see how this logic would apply at all in your case.”
The Hungarian consortium also hinted that the Czech company does not currently have idle industrial capacity, so It would not solve one of Talgo’s main problems, whose order book, with more than 4 billion euros, is at its highest and has serious options to continue rising and urgently needs more productive capacity.
Skoda Transportation is primarily engaged in the manufacture of self-propelled single- and double-decker electric trains, as well as locomotives, but all for regional and local services. A merger with Talgo would bring it the high-speed and long-distance business that the Spanish company is engaged in.