Blackstone, the great Spanish landlord, is launched to be one of the largest motorway operators in the world

Blackstone, the great Spanish landlord, is launched to be one of the largest motorway operators in the world

It is the great corporate operation in Europe so far in 2022 and, in one way or another, it will have some of the big names in the Spanish business scene as its protagonists. Blackstone, the largest landlord in Spain, has teamed up with the Italian family Benetton to launch a purchase offer for Atlantiaone of the world's largest motorway operators, owner together with ACS of Abertis and that, in addition, manages the airports of the Italian capital and the Côte d'Azur.

This acquisition looks like a multi-pronged move. The construction company chaired by Florentino Pérez is also studying a competing offer for Atlantia, although it has not yet been decided. In this case, the company of the president of Real Madrid would not go alone either, but hand in hand with two other large investment firms: GIP, owner of 20% of Naturgy; and Brookfield, which in recent months has invested in the Spanish hotel sector.

Three large funds with interests in Spain thus focus on highways, which become assets of interest for international investors, given that, basically, they carry stable rates, supervised by public administrations and which are revised with inflation.

In this international business move, the actors involved have more than one role. ACS and the Benettons can now face each other but, at the same time, they are partners in Abertis. A company that was divided, almost a decade ago, after a war of competing offers; and that they share practically half, although the Benettons have one more share. In the end, it is the Italian company that decides and, in return, it also has to sign up for Abertis's high debt.

The first to make a move, officially, have been Benetton and Blackstone, who start with an advantage. The reason is that the family that also founded the clothing chain is already the main shareholder of Atlantia. It has 30% of its shareholding through Edizione, the company that acts as its main investment vehicle.

Now, the Benettons and Blackstone have formed a new company, where they operate under other names. This new signature is called Schemaquarantatrè (Scheme forty-three). 65% of this company is in the hands of the Benettons, through another company, called Sintonia and which, coincidentally or not, is the one with which they bid for Abertis.

Meanwhile, Blackstone has another 35% of Schemaquarantatrè through two companies located in Luxembourg, BIP Hogan and BIP-V Hogan, according to the information they have sent to the Italian stock market.

Together, Benetton and Blackstone offer 23 euros for each Atlantia share that the Italian family does not own and are considering taking it public. In this way, Atlantia would be valued at around 19,000 million euros, although the bill goes up to 58,000 million if the debt is included.

These last figures are the starting point. If ACS and its partners want to gain full control of Atlantia, they will have to put more than 23 euros per title on the table. It is currently trading at 22.8 euros.

Blackstone's role in this offer is, from the outset, to finance it, because it will have to inject 4,000 million into the company with which the purchase offer is launched, the takeover bid. It would be, if it goes ahead, its largest corporate movement in the transalpine country. But beyond financing, with Atlantia, Blackstone will step on the accelerator in the concessions business.

He will own, together with the Benettons, half of Abertis; also from the two airports in Rome (Fiumicino and Ciampino) and from the French ones on the Côte d'Azur (Nice, Cannes and Saint Tropez); in addition to a portfolio of highways in France, Brazil, Chile and Mexico. The majority, through Abertis.

These are recurring income businesses, where collapses are not expected, regulated and, in addition, they are revised based on inflation; which in the current context would be key for Blackstone and for any fund that has to promise a return to its investors.

The US agency Reuters pointed in this direction, pointing to regulated infrastructure groups (highways, airports, ports...) as a focus of interest for investors, because more than 70% of the assets owned by infrastructure companies have room to pass on the rise in inflation to customers.

The American giant plans its great investment in Italy, but it will not be the first. One of his big moves in that country was the purchase of 20% of Versace. He paid 210 million dollars. Four years later, in 2018, the textile group was acquired by Michael Kors, who valued the 20% held by the US fund at $424 million.

In Spain, the investment giant is, above all, linked to the brick. He is considered the largest owner of rental homes, estimated at nearly 40,000. It does not operate under its own name, but rather is behind companies such as Testa, Aliseda or Anticipa, among others. With these last two, moreover, will manage part of the asset portfolio of the Management Company for Assets Proceeding from Bank Restructuring (Sareb). The 'bad bank' has awarded Blackstone the management of real estate assets valued at more than 25,300 million euros and will do so together with Hipoges, controlled by another big investment, the KKR fund.

Blackstone is the largest property owner but is also in the process of restructuring its investments and making changes. For example, last week it sold more than 700 homes to the Axa group for around 285 million euros. It is not his only step backwards in Spain. At the end of 2021, he placed the 'for sale' sign on the 'Hercules portfolio', mortgages that, in 2014, he bought from Catalunya Caixa.

It seems that Blackstone has shifted its purchasing focus away from Spanish brick and is more interested in highways. In this case, Spain has a high weight for Atlantia, especially due to the Abertis tolls. In the last financial year, Atlantia obtained in Spain 721 million of the 3,350 million euros of its operating profit.

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