Australian fund manager IFM Investors is nearing a tender offer for up to 14% of the remaining public shares of OHL Mexico as part of its pending EUR 2.78bn (USD 3.45bn) acquisition of OHL Concesiones, according to sources.
The offering is required under Mexican law based on the indirect change in control at OHL Mexico’s parent, OHL Concesiones. Unlike other types of tenders, IFM in this case has more flexibility to set the tender price and minimum acceptance conditions, based on rules that govern indirect-change-of-control offerings, sources said.
IFM expects to close the OHL Concesiones transaction in the coming weeks with all equity, sources said. The existing capital structure of OHL Concesiones will remain in place. The tender offer will be made as part of the closing.
A lawyer familiar with Mexican security regulations said the tender offer for the remaining public shares of OHL Mexico is “really meant to provide some assurance to minority shareholders that in the event the company falls under control of a new party, then they will be entitled to cash out.”
The offering may result in the delisting of OHL Mexico. If less than 12% of shares remain public, IFM can make a voluntary delisting offer. At less than 5%, it is mandatory for IFM to do this.
IFM is working with a local bank on the offering. IFM hired BNP Paribas to help it close the acquisition of OHL Concesiones, Inframation previously reported. BNP Paribas is not working directly on the tender offer.
IFM and OHL, through a joint venture called Magenta Infraestructura, acquired 85.85% of OHL Mexico through a public tender last year. The upcoming tender offer from IFM will cover the shares that were not purchased in that offering.
The Australian firm last month agreed to sell a 49% stake to CDPQ in Circuito Exterior Mexiquense (Conmex), a unit of OHL Mexico, for an undisclosed price.
The transaction with CDPQ will contribute to IFM’s equity payment for OHL Concesiones, sources said.
At last check, OHL Mexico shares traded at MXN 33.98, with a total market cap of MXN 58bn (USD 3bn).
OHL Mexico has disclosed aspects of IFM’s plans for the pending tender offer. Robert Crimes, an analyst with Insight Investment Research, said the price for the tender offer “will be set by IFM’s level of keenness to acquire OHL Mexico’s minorities,” according to a research note.
IFM would offer “attractive” returns if it pays MXN 40 per share, or about EUR 432m for the 14% outstanding shares, added Crime.