Construction

Abertis and Citigroup empty pockets for US toll road

20 May 2008

The Spanish construction group and Citigroup s infrastructure fund have stretched themselves to the limit to pay $12.8bn for the Pennsylvania Turnpike. The pair is targeting returns in the low double digits a level that looks meagre for this kind of deal.

Reality mugs overoptimistic UK house builders

24 Apr 2008

The likes of Persimmon and Barratt hoped that a housing market rebound in the second half of the year would save them. But the latest news suggests things could get a lot worse before they get better. If house prices really tank, it may not just be banks which need rights issues.

Sacyr free to sell Eiffage stake, but are the French free to buy?

17 Apr 2008

The Spanish construction group may have jumped the gun when it said it had clinched a deal to sell its 33% stake in Eiffage to French investors. The wouldbe buyers fear they might be seen to be acting in concert, and they aren t rushing to confirm the deal.

Sacyr just about saves face with E2bn Eiffage stake sale

9 Apr 2008

The Spanish construction group has had to admit defeat in its longrunning effort to control its French rival. French investors are paying a 5% premium, allowing Sacyr to report a tiny gain. That sugars the pill slightly, but this smells like a political compromise.

Is Sacyr desperate for cash?

5 Mar 2008

Why else would the Spanish construction company brave choppy markets to IPO its motorway business? Sacyr may have E20bn of debt, but it s not as bad as it seems, thanks to accommodating banks. Still, the Itinere IPO would certainly help.

Saint-Gobain shareholders might rue Wendel truce

12 Feb 2008

Wendel owns 18% of the French building material group, whose shares are down by a third in six months. The drop makes both the management and the investor inclined to agree to a standstill on the Wendel holding. But a showdown could be better for shareholders.

Vinci’s stake in Paris airports shouldn’t make it favourite buyer

2 Jan 2008

The French construction company has bought a 3% stake in stateowned airport operator ADP, hoping to muscle in as the favoured buyer if and when the company is privatised. The French government should make it clear other contenders will have a chance.

In a crunch, company books are unreliable memoirs

3 Dec 2007

Financial groups the world over are writing down structured finance assets. Meanwhile, Lennar is the latest homebuilder to take a haircut on its land holdings, to the tune of a whopping 60%. Book values, at times a reliable floor for valuations, aren t trustworthy right now.

Wendel likely to turn up pressure on Saint-Gobain

27 Sep 2007

The French investment fund has built up a E1.6bn, 6% stake in building materials group SaintGobain. It says the surprise move is friendly. But Wendel s stated strategy has always been to "control" the companies it invests in. Saint Gobain s sleepy days are over.

Infrastructure leverage boom may haunt investors

17 Sep 2007

Investments in assets like toll roads and bridges are said to be safe because of the stability of their cash flows. But easy debt markets fuelled leverageladen deals and have left them little room for a hiccup in growth. This could spell trouble.

Saint-Gobain pays Maxit price for strategic re-focus

7 Aug 2007

This is pricey. But after good results in the first half, the new CEO can show what he means by his new stronggrowth strategy. The French building materials company is spending more than E2bn to acquire HeidelbergCement s industrial mortar division Maxit.

French watchdog hands Sacyr a E10bn bill

27 Jun 2007

This is the price the Spanish construction group is facing if all Eiffage investors tend their shares to the new bid it has to launch. Sacyr s attempt at a creeping takeover was clumsy. It must now explain to its own shareholders how it will finance the deal.

Interest in Tarmac shows Lafarge is back in shape

4 Jun 2007

The cement giant is on a roll after 18 months of restructuring led by a new CEO backed by Albert Frere, its dominant shareholder. The stock is up 70% and the company is on the lookout for acquisitions. And Frere may be raising money to up his stake in the company.

HeidelbergCement overpays with £8bn Hanson bid

15 May 2007

Given the punchy price and the antitrust issues other obvious bidders would face, the risk of an interloper looks low. The price isn't just over 12 times 2007 ebitda. Counting synergies, Heidelberg will earn a 5.4% return, well below Hanson's cost of capital.

High prices settle into basic industry

4 May 2007

It s not clear what HeidelbergCement might pay for Hanson, a £7.5bn UK materials group. But the shares are now at 11.6 times ebitda. Vulcan paid that high a price for Florida Rock in February. That deal looks to have set a trend in this consolidating industry.

Sacyr faces hefty bill if forced to all-cash Eiffage bid

25 Apr 2007

French courts could force the Spanish contractor to make a cash offer for it French rival. The E8bn price tag would be hard to swallow. The company is already highly leveraged amidst fears the Spanish real estate bubble is about to burst. Spanish banks might pull the rug.

Spanish slowdown shows urgency of Sacyr bid

23 Apr 2007

You certainly can t fault the Spanish builder for the audacity of its hostile E9.5bn allshare offer for France s Eiffage. Yet the bid may be driven as much by fear as by bravura. Spain s construction boom is showing signs of slowing sharply.

Sacyr teeters on threshold for full Eiffage bid

5 Apr 2007

The Spanish group owns 33.2% of the French construction group, but it doesn t want to launch a full bid. It says it just wants board seats. Eiffage has been right to turn it down. That has avoided a creeping takeover. But a standalone defence may have reached its limits.

Persimmon should bulldoze homebuilder merger

28 Mar 2007

Scale and price are two reasons why the UK housebuilder might try to break up the planned £5bn merger of rivals Wimpey and Taylor Woodrow. Woodrow, the less efficient of the two, could be the more attractive. Offering a better deal than the one on the table wouldn t be too hard.

Housebuilders put up for sale sign with £5bn merger

26 Mar 2007

The allshare tieup between Taylor Woodrow and George Wimpey may make sense in a consolidating market. But shareholders' best hope may be that a third party breaks in and offers at least one participant a proper premium.