It looks like Dividend for Life is not the only one appreciating Abertis Cash flow consistency, Atlantia, one of the biggest toll road operator in the world, is considering merging with Abertis.
Currently, Atlantia has higher revenue and profit, but all the investment taken by Abertis could revert this situation. Abertis is currently undervalued considering the growing cash flow expected in the next 3 to 5 years (I would not be surprised if Abertis could generate more than 4B€ Free Cash Flow by 2025). This happens to be a good thing, as it gives me more time to increase my position.
However, we should never say no to a good offer.
For good offer, I am considering anything above 20€ and this I believe it will be difficult to reach. I expect the offer will come between 17 and 18€ that largely underestimate the value of the company.
An ideal scenario would be to accept an offer above 20€, sell your shares and wait for the combined company to reach an interesting price level (it always comes).
Atlantia is indeed a good company as well, more conservative, less diversified but with some interesting assets.
Let’s see what will happen in the next days, in the meantime, Abertis is protecting itself buying 100% of HIT (highways next Paris), it is adding more debt to discourage buyers, but it’s adding valuable cash flow to shareholders.
So, it’s a win-win situation currently for Abertis shareholder.
For the ones that have not bought them yet, be patient because more opportunities will come soon.
The offer has been lowered than expected, but it looks like Top Executives already accepted it.
ACS doesn’t look very confident in a counter-offer.
So, I recommend to sell now, that it’s a bit higher than Atlantia offer.
Atlantia could be a very interesting company considering the large synergies possible.