Ferrovial's Acquisition of 5% Stake in 407 ETR Boosts Stock Price

Ferrovial shares rose by 1% today following the announcement of a strategic agreement to acquire up to 5.06% of 407 ETR from AtkinsRealis. This deal values 407 ETR at a total equity value of CAD 41.3 billion, marking a significant increase from its last transaction value of CAD 30 billion in 2019.

This acquisition is seen as a positive development for Ferrovial for two main reasons. Firstly, it sets a higher valuation standard that exceeds market expectations and recently reported valuations in the media. Secondly, it demonstrates Ferrovial's confidence in resolving the upcoming S22 penalties for 407 ETR and its long-term cash generation capacity. An analyst from Jefferies remarked that investing in long-term highway concessions in North America with high Internal Rate of Return (IRR) directly aligns with Ferrovial's strategic priorities, viewing this as a positive development supporting their buy thesis.