ACS: towards renewables after the sale of its industrial division
Florentino Pérez does not stop posing challenges, although in some cases they are calculated. This is the case of the presidency of Real Madrid, which officially opens the presentation of candidacies, although everyone discounts since he may be the only candidate for his sixth term as head of the white entity.
It has also announced that it will take to the Shareholders’ Meeting on May 7 a capital increase of up to 574 million euros, through the issuance of new shares with a par value of 0.5 euros each. It will be charged to reserves, without issue premium and will be allocated free of charge to shareholders.
And continuing with the world of ACS, his new project will be what allocate the amount of an initial 4,200 million euros after the sale of its industrial business, with Cobra as the main bastion, to the French Vinci. An agreement closed after almost five months of negotiations and that has been completely settled in cash, with a lower initial amount, but that can be exceeded, up to 5,580 million euros.
The crux of the matter is a variable of between 730 and 780 million for the business cash and 600 more, seven years ahead and even nine and a half, which will receive for the development of energy projects for the portfolio sold. Now the operation will be analyzed by the Spanish government, after the approval on strategic operations in times of pandemic.
That is the agreement that if you remember in stock market terms, it was discounted when the negotiations with Vinci began. That October 2 of last year, the value rose 25.85%. Since the announcement of the operation, the value has recovered 53%, so the confirmation of the news has not had an impact on the ACS price.
So far this year the value recovers slightly more than 4.54%, while in the last twenty sessions the value has advanced in the market at the rate of a 5.52% rise.
ACS price analysis
While the value is endorsed by Bank of America that raises the target price of ACS to 32 euros per share. The analysts of the North American investment bank do not believe that part of the money from the sale of its industrial business will be used to buy a relevant stake in ASPI, the Atlantia firm that controls the highways in Italy and which is for sale. And he does not believe it because he would spend almost all the money for this purpose. And also because it would compete with the Italian government itself for its purchase.
Nevertheless, Bank of America does not see with such good eyes the progress of the business of the German Hotchief, in which it participates and especially the Australian Cimic, with weak cash flow generation. An issue that is also the trigger for the resignation as CEO of the one considered to be Florentino’s successor, Marcelino Fernández Verdes, who will continue to be the CEO of Hotchief and president of Abertis.
And although Florentino Pérez will be CEO and president, Fernández Verdes will be in charge of looking for investment opportunities with the bulk of the money from Vinci, which must replace 54% of the group’s income from its sold business.
According to the premium indicators of Investment Strategies, ACS, in consolidation mode, achieves a note, two points higher than 7 out of 10 in total score. With an upward trend in the medium and long term and total positive moment, compared to the volume of business, which in its two aspects, in the medium and long term, is decreasing and a range of amplitude, that is, the volatility that marks the value, which is growing in the medium and long term.
ACS premium analysis
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