Talgo has again seen its stock value slip, dropping about 25% in recent weeks after the government vetoed the hostile takeover bid led by Magyar Vagón (or Ganz-MaVag). The Hungarian consortium had proposed a five euro-per-share offer to Talgo’s current shareholders, a price that valued the company at approximately 619.3 million euros. In the latest trading session, Talgo’s share price stood at 3.74 euros, translating to a market capitalization of roughly 463.2 million euros and a loss near 156.1 million compared with the pre-offer valuation.
Before November 16, 2023, the date Talgo disclosed in a relevant event to the National Securities Market Commission (CNMV) that it was in talks with an investor to sell the company, the stock traded under four euros. The news sparked a rise of almost 12% in a single session, taking the price to 4.4 euros per share.
Months later, on February 8 of the current year, after the identity of the potential bidder was confirmed, Magyar Vagón, the shares surged again to reach the highest level in two years, at 4.8 euros. swiftly, as reported by ACTIVOS, the economic vertical of Prensa Ibérica, the government voiced disagreements with the offer. From those levels, Talgo’s market capitalization has contracted by 131.29 million euros up to the close of the most recent session.
Most recently, since August 27, when the Ministry of Economy confirmed the veto to the Hungarian consortium’s bid, shares have fallen 8.8% in that single trading day. Since then, the slide deepened to a cumulative decline of around 13% across seven trading sessions.
Minority shareholders file complaints against the government
The Association of Minority Shareholders of Quoted Companies (AEMEC) is already preparing legal actions against the government veto to defend the rights of more than 8,000 Talgo shareholders who find themselves at a disadvantage due to the limit placed on a voluntary offer by a corporate group from the European Union. The association intends to pursue all relevant administrative, civil, and criminal avenues to compensate any damages to shareholders.
This organization argues that the conditions for suspending the offer are not met under the anti-takeover shield and says it will challenge any decision from the Council of Ministers, the Ministry of Industry, Trade and Tourism, or the Foreign Investment Board that blocks shareholders from exercising their sale rights, contending that such actions must not be arbitrary or politically driven and must align with constitutional guarantees.
Unions demand an industrial plan
Since the veto emerged, labor unions have pressed the government to provide a working industrial plan for Talgo. The latest statement from the Federation of Industry, Construction and Agriculture of UGT claimed that underinvestment is risking jobs as plants run at full capacity and deliveries to customers press hard. UGT has urged solutions from Talgo’s current management, while Comisiones Obreras (CCOO) has called for an urgent meeting with Talgo’s leadership and government to clarify the company’s future and possible remedies to the capacity constraints that hinder meeting workload.