October 26, 2017 / 1:02 PM / 2 years ago

Exclusive: Atlantia mulling sweetener for Abertis bid - sources

By Francesca Landini, Paola Arosio and Andrés González

FILE PHOTO: Toll road operator Abertis´headquarters is seen in Barcelona, Spain, October 9, 2017. REUTERS/Eric Gaillard

MILAN/MADRID (Reuters) - Italy’s Atlantia (ATL.MI) plans to improve its offer for rival Spanish toll roads operator Abertis ABE.MC to trump a 17.1 billion-euro bid from Spanish construction giant ACS’s (ACS.MC) German unit Hochtief (HOTG.DE), two sources said.

The Italian infrastructure group said in May it wanted to buy Abertis in the biggest acquisition announced so far this year in Europe.

A tie-up between Atlantia, controlled by the Benetton family, and Abertis would help both firms in their drive to branch out from their home markets.

On Oct. 10, Atlantia officially launched its bid, offering 16.50 euros in cash and 0.697 Atlantia shares for each Abertis share for a total of around 15.7 billion euros ($18.4 billion).

“Atlantia will propose a new offer that will hopefully put an end to the story,” one of the sources close to the matter told Reuters.

“The new proposal will likely remain a combination of cash and shares but could have an improved cash component,” he said.

Another sweetener could be the scrapping of a lock-up clause on the new Atlantia shares Abertis investors will receive if they subscribe to the tender offer, the source said. But he added the Rome-based group was no hurry to move at present.

After ACS-Hochtief filed its rival bid last week, Atlantia’s offer was put on ice while the Spanish market watchdog CNVM looked into the counterbid.

Under Spanish rules, the review could take weeks or months, giving the Italian group time to work on an improved offer.

A final decision on Atlantia’s rejigged bid will come only after the CNMV has made up its mind on the ACS-Hochtief offer, the source said. A second source confirmed this plan.

Atlantia declined to comment.

ACS-Hochtief also have the option of tweaking their offer and the source said they were still looking for investors interested in teaming up with them on the deal.

Spanish builder ACS (ACS.MC), whose chairman Florentino Perez is also the head of Real Madrid soccer club, launched the bid via cash-positive Hochtief to protect its credit rating.

Hochtief said last week it had clinched financing of 15 billion euros via JPMorgan and would launch a capital increase worth up to 3.6 billion euros to fund the acquisition.

The German builder and its parent company were considering several asset sales to reduce the debt part of the deal and could put a minority stake of French motorway operator Sanef, controlled by Abertis, on the block, three sources said.

One of the sources said Abertis could sell 20 percent of Sanef, bagging more than 1 billion euros should the ACS-Hochtief bid win out.

Hochtief and Sanef declined to comment on the issue.

Additional reporting by Matthias Inverardi in Duesseldorf and Dominque Vidalon in Paris; Editing by Edmund Blair

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