Spanish infrastructure group abertis has sold more than half its 31.35% stake in satellite operator Eutelsat.
In an accelerated share placement, abertis sold a block of 35, 218,237 ordinary shares of Eutelsat, representing 16% of the outstanding share…
Spanish infrastructure group abertis has sold more than half its 31.35% stake in satellite operator Eutelsat.
In an accelerated share placement, abertis sold a block of 35, 218,237 ordinary shares of Eutelsat, representing 16% of the outstanding share capital of the company, for a purchase price of €27.85 per share. Credit Suisse, Morgan Stanley and Société Générale acted as joint bookrunners on the placement.
abertis stated that it netted total proceeds of approximately €981m, giving it a net book gain at the consolidated level of €396m. The Spanish company told SatelliteFinance that it has not yet taken any decision in regard to what it would do with these proceeds, although hinted that it would likely be allocated either to fund new investments or to reduce existing debt.
To that end, an abertis spokesperson explained the reason behind the sale, “This move has to be understood in the strategy of the company to add more strength to the balance (sheet), which will allow abertis to undertake new growth opportunities that could arise in the near future. As abertis management has recently highlighted, our strategy is mainly focused on growth opportunities in the motorway sector in the USA.”
As part of the placement, the Spanish company has agreed to a six-month lock-up in respect of its remaining 15.35% stake in Eutelsat. As to whether abertis will seek to sell its holding at the end of the lock-up period, abertis said that it has yet to decide on the matter adding that in the meantime it would continue to “actively participate in the management of Eutelsat, with full support to the development of the company and its growth strategy.” Adding, “We believe that there is still an important value creation potential in Eutelsat.”
Indeed, at its annual general meeting on 8 November 2011, Eutelsat’s board approved an 18.4% increase in the dividend to €0.9 per share. This distribution represented a pay-out ratio of 58%, in line with the satellite operator’s dividend strategy with Eutelsat CEO Michel de Rosen stating: “Our objective is to continue to increase dividends each year, with a payout ratio between 50% and 75%.”
The AGM also reaffirmed abertis’ four positions on Eutelsat’s 12 man board of directors. These consist of abertis telecom’s Marta Casas Caba, abertis infraestructuras’ Francisco Reynes Massanet, Tradia Telecom’s Tobias Martínez Gimeno and Retevision I’s Andrea Luminari. It is expected that this will be reduced over the next couple of months.
abertis originally acquired its 32% stake in Eutelsat in late 2006 for approximately €1.07bn. The sellers comprised a group of investment funds including Cinven, Nebozzo (a joint venture between TPG and Spectrum Equity Investors) and Goldman Sachs.
The Spanish company’s other satellite sector investment is Hispasat in which it is the largest shareholder with a 33.4% stake. abertis told SatelliteFinance that it has no plans to reduce its holding in Hispasat and in fact intends to further increase its stake.
