railway It is holding its Shareholders Meeting from 12:30 this morning. a decisive measure that will predictably approve the relocation of the partners’ headquarters to the Netherlands, sparking a real political, business and media backlash. But the party doesn’t end with the board vote tomorrow. The game has overtime. Here are the keys to one of the most famous business operations in Spain.
What is Voted on at the Shareholders Meeting?
Shareholders are voting at 12:30 on Thursday to relocate the company headquarters from Spain to the Netherlands on the recommendation of the Board of Directors. The company cited economic reasons. He thinks Ferrovial from the Netherlands is more plausible to be listed directly on Wall Street (a “well-known” alternative, in the words of CEO Ignacio Madridejos), which is his big goal. Because? 80% of Ferrovial’s business is already outside Spain, and 92% of investments through 2027 are in the United States, where it expects the business to “intensify even further”.
With this roadmap, the company listing in New York It directly reinforces your brand’s reputation, facilitates possible corporate transactions (acquisition or merger) in the region, and gives you access to a wider investor base. The thing is, Ferrovial is already listed on Wall Street through so-called ADRs, which is an inadequate option for the company as it feels it hasn’t captured all of its value as a company.
In addition to this reason, the company points out that: Moving headquarters to the Netherlands also offers you other benefits: It is a country with a triple ‘A’ credit rating higher than Spain’s, a favorable environment for businesses and investors, and a reliable legal system. These advantages should translate into lower financing costs in debt issuance.
Tension with the government
Not surprisingly, Ferrovial announced on February 28 that it would offer shareholders to relocate its headquarters to the Netherlands. The government didn’t like it.. After a legislature where the executive directly clashed with business people, Ferrovial’s statement was interpreted as a result of what this climate could bring. The company also acknowledged that it needed to address the issue in another way. He did not explain the decision to the Government sufficiently in advance (but several hours) and one of the reasons for the march Increased legal certainty in the NetherlandsThis is tantamount to saying that Spain does not have this security to the same extent.
The government came out in a whirlwind against the relocation. He did this by implying that the decision was justified so that the Del Pino family, who owns one-third of the capital, would receive tax benefits; Looking for legal loopholes in the anti-opas shield is something experts consider impossible.
Tensions escalated when Gonzalo García, Minister of State for the Economy, took an unusual move (discussed by some as intervention) in writing to warn the company’s CEO. I didn’t see “economic motivations” Implicitly, this was tantamount to warning the Tax Office, as the Tax Office could prevent Ferrovial from benefiting from the tax neutrality regime if the reasons were shown to be uneconomical. In other words, Ferrovial could have gone after paying a large number of millions to the Treasury.
Does the game go into overtime?
The key here is timing. On the one hand, it seems clear that the majority of the Board will support the relocation decision. The president will vote in favor Rafael del Pino (20.4% of capital); some funds, such as his sister María (8.2%) and the giant TCI, which has increased its position to 7%.
Also, California pension plans Calpers and Calstrs, Canadian fund CPPIB and Calvert Investments (manager of Morgan Stanley) funds will follow in the footsteps of TCI, which has already shown at least 36-40% support. To these favorable votes, we must add the astonishing last-minute turnaround from Norway’s Norges Bank, which announced a few days ago that it would vote against because the transaction “does not maximize value” for shareholders. a few hours after the meeting they decided to vote in favor.
And against? Until now and after Norges’ return, only the opposite position of Leopoldo, a member of the del Pino family, is known, slightly over 4%. The key point is that Ferrovial made the operation in its “Cross-Border Joint Merger Project” conditional on not exceeding $500 million in payouts to shareholders who voted against and demand repayment of their titles; 2.57% of the capital.
Leopoldo del Pino does not appear to be willing to demand repayment of the title deeds for the time being. And the truth is, Norway’s withdrawal removes any drag effects that might exist, making it somewhat harder for other shareholders to follow that path.
The thing is, the shareholders who voted against get this lot on de facto extension as they have one month from the announcement of the transaction in the Official Gazette of the Trade Registry (Borme). Ferrovial Shareholders Meeting.
What will happen the day after the Shareholders Meeting?
If the General Assembly approves the transaction, save for a major surprise, a one-month period is opened for those who voted against or did not vote to claim their titles reimbursed. that’s what could happen jeopardize the operation. If the requested repayment amount exceeds 500 million Euros (at the rate of 26 Euros per title), as determined by the agreement of the Board of Directors, the operation will be cancelled.
If this is not successful, the merger operation will begin, in which Ferrovial will acquire the parent company of its current subsidiary (FISE) in the Netherlands. FISE will take over all of Ferrovial’s assets, liabilities and other legal relationships and will allocate FISE shares to Ferrovial’s shareholders in exchange for their one-to-one shares in Ferrovial. For this reason Ferrovial will cease to be liquidated without liquidation..
FISE will request that its shares be accepted for trading on Euronext Amsterdam and the Spanish stock exchanges on the effective date of the merger (which takes place at 00:00 on the day following the date of the merger). the deed of merger is issued in the Netherlands) or shortly thereafter, after that also entry to one of the United States stock exchanges. Ferrovial’s shares will no longer be traded in the Spanish markets.
For tax purposes, the merger will also be effective at the Time of the Merger. FISE’s board of directors will consist of the same members who form part of the Ferrovial board.
What role does the Treasury play in the ‘Ferrovial Case’?
Ferrovial argues that there are economic reasons that justify the change of headquarters and shows its intention in this direction. Benefit from special tax regime for mergersIt allows the deferral of taxation of profits that may arise in the course of business activity. If the transfer of the headquarters continues – in the form of merger by absorption – the Tax Office will then be able to verify whether there are really “valid economic reasons” that justify the transfer of this headquarters.
Soledad Fernández, Director of the Tax Office, The inspection will review the process at that time and these verifications are long-term, with a duration of one or two years. If it is determined that there are “no valid economic reasons”, AEAT may decide that the special merger regime cannot be applied and Ferrovial may then be required to refund any applicable tax benefits. “Logically, this type of regulation is always accompanied by high amounts,” the AEAT director generally warned.