Minority Shareholders, Major Losers
The Basque industrial group Sidenor has publicly signaled its interest in taking a stake in Talgo without launching a formal public takeover offer. The plan would also involve participation from the Basque Government and SEPI. The move opens a wide range of options for structuring the deal and raises several questions, including how minority shareholders, who hold roughly 55 percent of the capital, would be affected, and what choice Pegaso, Talgo’s main shareholder, will make.
Last Wednesday Talgo confirmed receiving a letter of interest from Sidenor expressing willingness to close a partial or total purchase. However, subsequent reports indicated that the group led by José Antonio Jainaga intends to secure a stake under 30 percent, the threshold that would avoid a full bid for the entire company.
Talgo’s only substantial reference shareholder is Pegaso, a consortium including the Trilantic private equity fund, the Oriol family, and entrepreneur Juan Abelló. This consortium has sought to unwind its position for more than two years, with limited success, especially after the government vetoed the Hungarian bid from Magyar Vagon on national security grounds.
One option on the table would be for the fund and the family groups to sell 30 percent to Sidenor and keep 10 percent. That stake could later pass to the Basque government through the autonomous public fund Finkatuz and SEPI in equal parts. Sidenor’s aim is to stabilize Talgo’s ownership by enabling Pegaso to exit. If this framework were adopted, the CNMV could view it as a concert among the three parties and require a full bid for the entire capital, a move not currently on the table.
Another possibility is that public bodies wait to learn Sidenor’s industrial plan for Talgo. If the plan meets all requirements and as reference shareholder the Basque group could initiate a capital increase that preserves its stake while bringing in fresh funds, for example to build a new factory to address the industrial delays that have affected delivery schedules.
Trilantic’s position remains unclear. During the Hungarian bid, negotiated directly by the fund, Trilantic argued that its exit from Talgo would be tied to a full bid for 100 percent of the capital. That option has lost momentum, as there has been no explicit or tacit commitment this time. There is also a possibility that Pegaso dissolves and its constituent companies pursue different paths.
Minority Shareholders, Major Losers
Minority shareholders, about 55 percent of the capital, would be the big losers if there is no bid for the entire Talgo. They would likely have to sell on the market to unwind positions, and at prices well below the five euro per share that was promised in the Hungarian bid. Industry sources say Sidenor’s offer will be materially lower. Meanwhile, Talgo’s stock has fallen almost 20 percent after the veto, only to rebound somewhat in the following days on reports of Sidenor’s interest. The Association of Minority Shareholders in Listed Companies has publicly condemned the veto and signaled possible legal actions, which have not materialized.