Hitachi buys Ansaldo Breda ( High speed train Freccia Rossa)
Hitachi near buying Finmeccanica’s Ansaldo Breda and Ansaldo STSby Gianni Dragoni
Finmeccanica CEO Mauro Moretti wanted the Japanese, and he got them. The Hitachi Group, barring unforeseen circumstances, will make a definitive offer today to buyFinmeccanica’s rail transport unit Ansaldo Breda, along with the one it really wants -- the Italian state-controlled defense group’s entire stake (40%) of Ansaldo STS, the profitable publicly traded signaling company. Hitachi will have to make a mandatory offer to buy the remaining 60% of Ansaldo Sts.
The binding offer of the Japanese was finished over night, with the meeting of the board of Hitachi. This morning Moretti will present it to Finmeccanica's board of directors, and it should be accepted without much discussion, in the style of the house. The board should meet before the market opens.
According to authoritative sources, Hitachi will pay approximately €20-€30 million as capital to acquire the assets of Breda, the value of which is largely covered by debts and liabilities. Its offer for Ansaldo STS will be more generous, around €9.2 euro per share (compared to yesterday's price of EUR €8.835, -0.17%): this would correspond to €1.84 billion for 100% of STS (of which approximately €730 million for Finmeccanica's stake).
Hitachi has formalized the binding offer only at the last minute. Previously it had only submitted a proposal but with a series of questions and requests of guarantees. The Japanese have been able to count on the support of Moretti, who knows the rail sector very well after having led state-owned Ferrovie dello Stato until the end of May 2014.
Moretti believes Hitachi to be a more solid buyer and therefore did not accept Chinese group Insigma's request to enter into final talks. Insigma had submitted a binding offer valid until December 15 and a business plan outlining development and investment, focusing on growth in one of the most promising markets, China. The group Insigma, backed by Bank of China and the Chinese government, had offered about €1.84 billion for Breda and all of Ansaldo Sts.
Hitachi is assisted by the advisors Citi and the law firm Gianni Origoni Grippo. Finmeccanica stock yesterday rose 6.2% to €10.97 euro on expectation that the deal would be announced. Consob did not intervene to seek clarification.
