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UPDATE 2-Ferrovial makes $876 million bid for Australia's Transfield
October 20, 2014 / 11:13 AM / 3 years ago

UPDATE 2-Ferrovial makes $876 million bid for Australia's Transfield

* Ferrovial approach at A$1.95/shr, 30 pct premium

* Transfield to open books to Spanish infrastructure firm

* Ferrovial on acquisition spree outside Spanish market

* Transfield shares up 27 pct (Adds details on Ferrovial, comment)

SYDNEY/MADRID, Oct 20 (Reuters) - Spanish infrastructure group Ferrovial has made a takeover bid for Australia’s Transfield Services Ltd, valuing the company that runs the country’s offshore asylum seeker detention centres at around A$1 billion ($876 million).

The Madrid-based group, which designs and builds highways and also owns part of London’s Heathrow airport, has been looking to strengthen its overseas businesses as it moves away from the crisis-hit Spanish construction sector.

Ferrovial teamed up with Australia’s Macquarie Infrastructure Fund to buy three regional British airports for 1.048 billion pounds ($1.69 billion) and took a 6.5 percent stake in Spanish airports operator Aena.

Ferrovial had made a conditional proposal at A$1.95 per share, a 30 percent premium to Transfield’s closing price on Friday of A$1.50, but a level the Transfield board said it did not believe reflected the underlying value of its shares.

However the company recommended that talks with Ferrovial continue, “to determine whether a proposal which would deliver better value to shareholders, can be put forward”, and has opened its books to the Spanish company.

Shares in Transfield, which also runs Sydney Harbour’s ferry network and services oil wells, rose 27 percent to A$1.90 on Monday.

The Spanish infrastructure group will not need external financing to make the offer, which it reserves the right to withdraw, Ferrovial said in statement to the stock market regulator on Monday.

Ferrovial had a net cash position of more than 1.5 billion euros ($1.92 billion) at the end of the first half, which it wants to invest, said Sabadell in a note to clients in which it described the Australian bid as positive.

Ferrovial shares were down 0.7 percent at 1059 GMT at 15.13 euros per share.

Transfield said its first quarter had experienced strong trading. The company provides operations, maintenance and construction services to a wide range of industries and employs more than 19,000 people in 10 countries.

In February it won a A$1.2 billion contract to run Australia’s two Pacific island immigration detention centres.

The centres on the Pacific island nation of Nauru and Papua New Guinea’s Manus island have been plagued by security and infrastructure problems and have been criticised by human rights groups and the U.N. High Commissioner for Refugees.

1 US dollar = 1.1418 Australian dollar 1 US dollar = 0.6205 British pound 1 US dollar = 0.7820 euro Reporting by Lincoln Feast in Sydney and Andres Gonzalez in Madrid, writing by Paul Day; Editing by Louise Heavens

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