Italy’s biggest builder Salini Impregilo (SALI.MI) gave the go-ahead on Tuesday to a takeover bid for stricken rival Astaldi (AST.MI), kickstarting a state-backed plan to revive the country’s moribund construction industry.
Salini said it would take a controlling stake in Astaldi, in bankruptcy proceedings, in return for an equity investment it had earlier put at 225 million euros ($253 million), though it removed that figure from its latest announcement on Tuesday.
The takeover is at the center of a much larger financing plan designed to fix Astaldi and create a new national champion.
As part of the overall exercise, Salini said it would raise 600 million euros in new shares and that banks would provide various credit lines worth a total of almost 1 billion euros.
Salini wants to be the cornerstone of an industry consolidation, using a takeover of Astaldi and subsequent mergers to create a business capable of competing head-on against global firms for major projects at home and abroad.
Salini’s board approved the Astaldi takeover on Monday night but confused the market on Tuesday by issuing two main statements in the space of a few hours: the first giving key financing figures and the second deleting some of them.
A Salini spokesman declined to comment when asked why the company had omitted these figures in its corrected statement.
Salini said its offer for Astaldi was conditional on receiving funding commitments for the plan by Aug. 1 from state lender Cassa Depositi e Prestiti (CDP) and from a group of commercial banks.
So far, CDP and the banks, including Italian lenders Intesa Sanpaolo (ISP.MI) and UniCredit (CRDI.MI) and France’s BNP Paribas (BNPP.PA), have only sent letters expressing a willingness to negotiate with Salini over funding support.
In relation to the 600 million euros share issue, Salini said 150 million euros would be set aside for the market.
It deleted an earlier reference to CDP taking 250 million euros of its share offer. It also omitted earlier references to its major shareholder, Salini Costruttori, taking 50 million euros and financial institutions 150 million euros.
In addition to the Salini share offer, the construction firm said the overall merger plan would be supported by various lines of credit worth a total of 984 million euros.
Salini has said a variety of funding would be needed to pull off a successful takeover of Astaldi and position the merged group to expand further. The overall project to revive Italy’s construction industry is known as Project Italy.
Astaldi is Italy’s second largest builder. Salini also has heavy debt and fears a failure of Astaldi could harm its own business, given they are partners in some major projects.
Source: Reuters.com