Italy, Benetton Talks Reach Crunch Phase on Autostrade Sale Plan
Italy, Benettons Consider Two-Step Plan for Autostrade Sale
(Bloomberg) -- The heads of infrastructure giant Atlantia SpA and Italy’s state-backed lender Cassa Depositi e Prestiti SpA are meeting in Rome and are close to a preliminary agreement on a two-step plan that would see the Benetton family’s company relinquish its control of highway operator Autostrade per l’Italia SpA, according to people familiar with the matter.
A deal would fulfill the billionaire Benettons’ pledge last July to exit ownership of Autostrade, ending a long-running conflict sparked by a deadly bridge collapse in 2018. The plan is preliminary and just one option being considered, said the people, who asked not to be identified because the talks are private.
Atlantia shares rose as much as 10% in Milan trading as investors cheered progress in the talks.
The collapse of the 1960s-era Morandi Bridge in Genoa remains a vivid national tragedy; 43 people died in the August 2018 accident, as cars and trucks plunged onto railroad tracks and streets below. Prime Minister Giuseppe Conte had threatened to revoke Autostrade’s lucrative toll contracts after a ministerial commission argued that the company had underestimated the deterioration of the structure.
Debt Plans
The plan under discussion envisages Atlantia, the world’s biggest toll-road operator, spinning off 70% of Autostrade in a new listed company, according to a draft of the plan seen by Bloomberg News. The new entity would then raise 6 billion euros ($7.2 billion) from CDP and other investors in a capital increase.
The fresh funds would be used to pay off 4 billion euros of Autostrade’s debt and to buy Atlantia’s remaining 18% stake in the highway operator. The deal would initially value Autostrade at 11 billion euros and should be completed by spring 2021, according to the proposal.
This process would ensure that Autostrade’s minority shareholders -- Appia and China’s Silk Road -- wouldn’t see their holdings diluted, one of the people said. The position of these investors, who hold a combined 12% in Autostrade, has been one of the stumbling blocks in negotiations in past weeks.
Atlantia Chief Executive Officer Carlo Bertazzo and his CDP counterpart Fabrizio Palermo are meeting in Rome on Wednesday morning and are close to a preliminary agreement, according to officials close to the talks. Atlantia’s board will meet Thursday to review its plan to spin off or sell its entire stake in Autostrade.
Investor Criticism
The long-running dispute has sparked investor criticism of Conte’s efforts to force the Benettons out of Autostrade. Billionaire activist investor Christopher Hohn has asked the European Commission to intervene in the dispute, saying the Italian government’s tactics breach European Union law.
Hohn’s TCI Fund Management Ltd., which controls more than 5% of Atlantia, said a forced sale would be “a coercive and illegitimate expropriation of assets,” according to a copy of the Aug. 4 complaint seen by Bloomberg News.
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