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Ties that bind

11 June 2021 By Christopher Thompson

Clan gatherings can be fraught affairs. Shareholders in Acciona ought to know. The 7.3 billion euro ($8.8 billion) Spanish infrastructure group wants to spin off its renewables heirloom, which bankers reckon will be worth more than the family-held controlling company. Investors are yet to get excited.

The planned initial public offering of Acciona’s wind and solar energy business – which accounted for roughly three-quarters of group EBITDA last year – comes at a tricky moment. The green bubble has deflated a bit, with the iShares Global Clean Energy exchange-traded fund down by roughly a third compared to its January peak.

That hasn’t put off the Entrecanales family, members of whom both run the business and hold a majority Acciona shareholding via two investment vehicles. Selling a 25% stake in Acciona Energia – as the spawn is known – would allow Acciona to pay down net debt exceeding 4 times forecast 2021 EBITDA. It should also give the unit more freedom to pursue a near-doubling of its energy capacity to 20 gigawatts by 2025. Acciona Energia could use its shares to buy rivals and make its 31 GW goal by 2030 easier to hit.

Such potential is not yet in Acciona’s price. On a multiple of 15 times estimated 2021 EBITDA, broadly similar to Portugal’s EDP Renovaveis, the unit would fetch 14.5 billion euros including debt. That compares to Acciona’s current enterprise value of around 13.5 billion euros, implying investors ascribe a negative worth to its other construction and infrastructure assets.

One major reason why is that post spinoff the Entrecanales clan will still control Acciona Energia, because Acciona intends to retain a majority stake. But investors are applying a pretty stiff dominant shareholder discount. Imagine the Acciona infrastructure rump trades on 8 times EBITDA, less than Gallic rival Vinci’s 10 times, and it would be worth 2 billion euros. Combining that with Acciona Energia and lopping off group net debt of 5.8 billion euros implies an overall equity value of 11 billion euros – 51% above Acciona’s current market capitalisation. Given green peers EDPR and Orsted also have controlling shareholders, Acciona investors may yet become more positive.


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