All the faces have already been turned upside down. Since the Australian fund IFM presented its takeover, not hostile but unfriendly, by un maximum of 22.69% of Naturgy’s capital last January, only the bidder’s position had been known.
But after the public statements on Friday, it is now also known that the operation does not like the directors of the energy company and its main shareholders.
In addition to refusing to sell their shares, neither as representatives of the shareholders nor in a personal capacity, they have justified their decision by the consequences the possible impact of the shareholder change on corporate governance of the company.
“The intention to request two proprietary directors together with the desire not to increase the size of the Board implies a necessary reduction in the number of independent directors to a level that makes it difficult to comply with the recommendations of good corporate governance.”
Transparency guarantee
Good corporate governance is a “guarantee of transparency and balance in the decision-making of a company’s board of directors,” he explains to Invertia. Maria de la Torre, legal expert in Governance and managing partner of Governance & Compliance.
“If there is an excess of proprietary shares, there is an opacity towards the shareholder, and the objective of every company is to seek the best value of the share. So, if the plans of the Australian fund are carried out, there would be a setback in the management of the company “.
For the lawyer, this action by IFM is not new. “Funds always do the same, they break the balance between shareholders. It is a classic. And, even more so, if they are the ones that maintain strategic investment, especially in listed companies.”
There is no longer any doubt. Naturgy has fought the fund by rejecting his offer. “If the process is completed, this council is going to be a pressure cooker,” added de la Torre.
Strategic company for Spain
One of the elements that has slowed down the IFM takeover bid has been the decision in extremis and rushing the government’s deadlines, which had until August to make a pronouncement.
The opa had to be approved by the government being a investment considered strategic and for seeking the purchase of a percentage higher than 10% by foreign investors. Since the beginning of the pandemic, the Executive reserves a “golden share” to protect Spanish companies in key productive sectors.
“This is not Zapatos López, it is a strategic company, the Government with its approval of the operation has left one of the energy jewels of Spain on the air,” adds the expert in Governance. “The Government has made a Let do, let go, and it does not make sense when at other times he is so interventionist “
He acknowledges that it is not a hostile bid, but there is a “hostility by default, and the way to get to the bottom has been quite evident.”
IFM plans
The fund’s reaction has not been long in coming and has positively valued the Directors’ report. In a statement he stated that “it is an opportunity to accept the offer“plus” excellent news for Naturgy shareholders, especially in the current industry environment, where IFM GIF believes that regulatory uncertainty and volatility (among other factors) are driving the weak performance of shares in Naturgy’s competitors. “
“The Australian fund will go ahead with its plans because it has a financial objective, whether its new partners like it better or worse. Everything it has said to date is like the Pied Piper of Hamelin, when it is inside it will have the power to say what think”.
But, as noted in the Naturgy statement at the CNMV, if the takeover is carried out, “cany Relevant change in corporate governance (in particular the determination of the number of Board members and the number of independent directors and their appointment or removal) would end up being the will of a shareholder who, aspiring to be relevant, has not launched a Control Offer “.
“You almost gave him something like a gold share for a company of the Naturgy entity”, adds María de la Torre.
Now the ball is in the court of minority shareholders. The share price closed on Friday at 21.59 euros, and IFM is offering 22.07 euros. “It is a very parity value, it only remains to ask those who would like to sell if they know what this shareholding change means for the future of a strategic Spanish company.”
Possible alternatives
The fund has assured that it has no intention of carrying out a delisting bid, but if its intention is to gain more than 17% of the capital, it leaves little room for doubt. “The most logical thing is that the next step is the exclusion bid.”
“Naturgy should fight back, it should wink at its minority shareholders and offer some kind of permanence or other offer, but they must be informed of the consequences of IFM’s entry,” concludes the lawyer.
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Reference-www.elespanol.com