Trevi surges; Webuild raises the price of its takeover bid

(Il Sole 24 Ore Radiocor) The move by Webuild , which has increased its stake to 18.9 per cent of the share capital of Trevi Fin Ind and has consequently raised the takeover bid price to €5.165 per share, has given a boost to the shares of the groundworks engineering firm, which are up 5.6% at €5.14 on the Milan Stock Exchange. Webuild, which on Friday had confirmed the price of €4.50 and lowered the offer’s trigger threshold to 50 per cent plus one share (from the two-thirds initially envisaged), has shaken things up by acquiring 13.916 per cent of Trevi at €5.165 per share. Webuild has thus increased its stake to 18.91 per cent of the share capital and announced that, given that the purchase ‘was made at a price higher than the consideration’ of the takeover bid, the new price ‘will be applied to all those accepting the offer, including those who had already accepted it’. Trevi shares have thus practically aligned with the new valuation, pending the assessment by the company’s board of directors, which had described the previous price as ‘inappropriate’ and ‘unfavourable’. It remains to be seen what Icop will do next (shares falling sharply), which had launched the initial voluntary public offer (VPO) for Trevi by offering 0.133 shares for each Trevi share and subsequently improved the exchange ratio to 0.165 shares – figures both deemed insufficient by Trevi’s board of directors. This view appears to be shared by the stock market, given that Icop’s public offer is now trading at a 10.1 per cent discount to market prices.

Analysts at Intermonte note that the Trevi board’s assessment of the price of Webuild’s takeover bid (considered to be below the fair value of between 5.1 and 6.1 euros per share) has been ‘overtaken by the revised bid’, whilst ‘more structural’ considerations remain on the table, including, amongst other things, execution risk and governance. In any case the experts consider the rationale behind the transaction to be ‘solid’ for both Webuild and Trevi, given that the success of the bid ‘would remove high value-added work phases from third parties, bringing them within a single group’ and would strengthen “their competitive position in tenders for complex, large-scale projects”.