By Nathan Allen and Alberto Delclaux
Shares in Abertis Infraestructuras dropped Thursday on news that its two suitors may team up for a joint takeover offer, potentially squelching the bidding war that has driven Abertis's share price up more than 35% since last March.
Actividades de Construccion y Servicios SA (>> company sheet) and Atlantia--until recently rivals in the tussle for Abertis--confirmed that they have held talks in separate filings sent to Spain's market regulator, the CNMV.
However, both companies said they haven't reached a definitive agreement.
At 0926 GMT, Abertis shares traded 4.2% lower at 18.59 euros ($23.08), while shares in ACS and Atlantia were up 7.1% and 5%, respectively.
Spanish newspaper Expansion had earlier reported that the two bidders were considering a joint-ownership agreement under which they would divide Abertis's Spanish and international assets among themselves.
Both companies want to avoid driving Abertis's share price up any higher and rendering their offers financially invalid, according to Expansion.
"An agreement between both bidders, whatever the final shape of the deal, eliminates the rivalry between them and hurts Abertis shareholders," said analysts at Bankinter, which recommends that investors reduce their stake in Abertis.
Since Atlantia submitted its initial bid of EUR16.3 billion in May 2017, Abertis's share price has risen 35%, giving it a market capitalization of EUR18.47 billion based on Wednesday's closing price.
The bidding process has become bogged down amid tensions between Spain's government, which is reportedly reluctant to let Abertis fall into foreign control, and the CNMV.
After the CNMV approved Atlantia's bid, Spain's ministries governing energy and public works weighed in to demand that the regulator revoke its authorization of the deal until they completed their own review.
ACS's rival bid of EUR18.6 billion, submitted via its German subsidiary Hochtief in October, has yet to receive approval from the regulator.
Both bids need the approval of the energy ministry, as Abertis holds a majority stake in satellite communications operator Hispasat, which the government considers a strategically important national asset.
Write to Nathan Allen at firstname.lastname@example.org and Alberto Delclaux at email@example.com