Last week, on a Friday night in January, La Caixa announced that it had become completely detached from Agbar following decades of being associated with the water company. But the entity chaired by Isidre Fainé is already preparing the recovery of the water services company in a complicated yet uncertain end operation.
In 2014, La Caixa sold all its shares in Agbar (24% of the total) but in return became the second largest shareholder in the French giant Suez. In this way, the link between La Caixa and Agbar was maintained and, in fact, since then the management team has continued to be led by Àngel Simón, a man from La Caixa.
But recently Suez has been the subject of a takeover bid by rival Veolia. The operation has been very complex and has had several setbacks, and as a result Veolia has been forced to raise the price significantly: finally, it has paid 20.5 euros per share, a price that Suez has never been worth on the stock market. .
This was great news for La Caixa, which preferred to sell its stake and take away 750 million euros for shares that in 2014 it valued at 442 million and last year at 602. Now La Caixa has 750 million that you can invest in buying other companies, and one option is precisely to get Agbar back, either by buying 100% or leaving a significant stake. It would therefore be a matter of undoing the sale made in 2014.
But the operation may not be so simple. Veolia, now in control of Suez, has said that Agbar is a strategic asset and, a priori, it is not very clear that it wants to sell the Barcelona water company. “It’s one thing to want to buy, but the other has to want to sell,” said an industry source. Other voices, however, assume that there is an agreement between Veolia and La Caixa to carry out the operation, and that if Fainé agreed to leave Suez it was because he had a prior agreement to buy Agbar when the merger between Veolia and Suez is complete. For now, though, that’s pure speculation.
Secrecy of the Spanish government
The integration between Veolia and Suez is indeed already agreed, but it will take months to complete. Among other things because the different countries where these two companies operate must give the green light to the operation. At the end of December, the Spanish government approved the merger of the Spanish subsidiaries of Suez and Veolia, but “with conditions”.
Now, surprisingly, the government refuses to explain what conditions it demands. Consulted by this newspaper, the Ministry of Industry branded the data protection law for not giving further explanations although it is more common for the government to specify these conditions. The most recent case was last summer, when the government detailed the eight conditions it set for the MFI fund for the takeover bid it launched on Naturgy, also linked to La Caixa.
The central government is branding data protection for not saying what conditions it puts in place to accept the takeover
La Caixa would have to ally with someone if it wanted to buy 100% of Agbar, as in the past the company had been valued at around 3 billion euros. If, on the other hand, he bought only a part of it, with the 750 million he has received from Suez, he might buy 25% of Agbar.
The water business is a monopoly and, as such, provides solid revenue and virtually guaranteed returns for the companies that manage it. “That’s why Veolia has paid so much,” explains Xavier Brun, director of the master’s degree in financial markets at UPF.
La Caixa is interested in Agbar because it needs to feed on dividends that allow it to sustain the 500 million it spends annually on social work. For now, it is highly dependent on dividends from CaixaBank, and especially from Naturgy. The gas company contributed 55% of the dividends that La Caixa received in 2020. However, the water business is not as juicy as the energy business. In 2020, La Caixa received almost 17 million euros in dividends from Suez, and in the previous year 24. Nothing to do with Naturgy’s 340 million or CaixaBank’s 167 million, for example.
Meanwhile, Angel Simon has been named one of 16 members of Veolia’s executive committee, four of whom are from Suez. If he stays there long, only time and Isidre Fainé will tell.
