Naturgy Shares Soar Amid Potential Takeover by TAQA

Naturgy’s stock has seen a significant uptick this 2024, rallying strongly in the wake of potential acquisition interest. The Spanish utility company’s shares climbed 5% on Wednesday, adding to a 3.3% rise on Tuesday. This upward trend marks eight consecutive sessions of gains, accumulating an impressive 11.7% increase in total. The surge in share prices follows confirmed negotiations between the Emirati group TAQA and the private equity firms CVC and GIP, which collectively hold 40% of Naturgy’s capital. These talks were officially confirmed on Tuesday after several days of speculation and an acknowledgment from Criteria, Naturgy’s major shareholder, regarding “preliminary” discussions.

This revival comes as Naturgy recovers from a 20% decline in its value over the past year, a drop linked to its removal from the MSCI indices due to its limited free float. The stagnation in shareholding, with two major shareholders (CVC and GIP) looking to exit without any clear resolution in sight, has also weighed on its market performance. Since the entry of IFM in 2021, the company’s stock has been more influenced by shareholder movements than by business operations per se.

The Emirati group confirmed that if the transaction proceeds, it would lead to an offer to acquire 100% of the company. In such an event, small investors could benefit from the premium typically offered in these buyout scenarios, potentially offering a lucrative exit opportunity.