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CVC rushes its IPO with the shadow of a takeover bid for Naturgy and the dispute with the Treasury

Date: July 15, 2024 Time: 05:15:50

CVC Capital Partners will begin trading on the stock market this Friday with a valuation that will be around 15 billion euros, to provide liquidity to shareholders such as former employees of the firm, the Kuwaiti sovereign fund KIA, the Singapore GIC and the Government of Hong Kong. among others. The placement on Euronext Amsterdam, scheduled for this Friday, has revealed data that is not known about the opaque structure of the Jersey-based company, such as detailed metrics of its business, its shareholders or the litigation risks of its funds.

The stock market debut will take place looking at Spain with several divestments underway in 2024 with CVC as the protagonist, for example, with the IPO of Tendam (Springfield, Cortefiel) or the sale of the indirect 15% it owns in the gas company Naturgy in the face of the possible purchase offer of the Taqa emirate. It is estimated that he will earn just over 5,000 million if he sells both stakes together with his partners Pai Partners, in the textile company, and Corporación Alba, in the gas company, respectively.

But the IPO brochure also reveals a large tax contingency for a Spanish operation closed a long time ago, but which now returns to the forefront of news because CVC is about to carry out the aforementioned divestments in Tendam and Naturgy in Es cloth that could be affected by it. Specifically, the Treasury has been demanding a million-dollar tax payment from the firm since 2021 for the sale of QuironSalud to the German company Fresenius in 2016. The venture capital manager identifies the invoice in dispute at around 270 million euros to the treasury, not including interest and fines, for disagreement in taxation.

CVC assures that “it is firmly challenging the technical basis of the settlements” by the Tax Agency (AEAT) raised by the 2017 sale of the hospital group. Both the investment firm and its lawyers “believe it is unlikely” that the Treasury is right, although it cannot guarantee that they will emerge unscathed. The Treasury denounced CVC for alleged fraud in the taxation of the sale of 61% of Quirón for 5,760 million, half of it in capital gains.

“The tax assessments described above have been referred by the AEAT to the prosecution because the relevant tax inspector has alleged that certain parties, including, among others, the general partner of Fund V, may have withheld information in order to avoid Spanish taxes. The prosecutor is currently considering the merits of such allegations and whether to file a complaint with the Spanish criminal courts.

CVC uses its clash with the Spanish Treasury as an example of the friction with tax authorities in different countries over the interpretation of tax laws and the payment of taxes. “Certain tax authorities are increasingly inclined to ignore the ownership structures through which private equity funds invest and tax distributions and capital gains directly on the fund itself, or by reference to the tax status of their investors.” , warns the firm in its brochure.

From Jaime, reference shareholder

The IPO of CVC Capital Partners reveals its ownership in detail for the first time. The American firm Blue Owl Investor is its largest shareholder with 8.1% of the shares, followed by the co-founders of CVC, Donald Mackenzie, with 7%; and Rolly va Rappard, with another 6.9%. Both will sell a small part of their titles. The new president, Steve Koltes, (4.4%) and the CEO, Rob Lucas, (3.6%) appear as prominent owners. The Spanish Javier de Jaime Guijarro, a partner in the firm since 1997, has acquired 3.5% of the company valued at more than 500 million euros, according to the transaction brochure.

In addition to an issuance of new shares through a capital increase, a relevant percentage of the placement corresponds to the sale of shares in Danube, of the Singapore fund; KIA (Kuwait), and Stratosphere (Hong Kong). Shareholders will also be paid a dividend of 307 million euros prior to its listing on the stock market, which will mean, for example, collecting 10 million for De Jaime. The prominent role of the Spanish executive has to do with his long career in the company of almost three decades in which he has participated in some of the most notable venture capital operations in the Iberian market.

Regarding its business metrics, the CVC manager is currently involved as a partner in 125 companies. Its income in 2023 reached 1,093 million euros. The management fees of the management team reached 744 million. Its profit after taxes stood at 633 million. With 1,154 employees, the British firm declares assets under management and advice valued at 186 billion euros, making it one of the main venture capital companies in the world.

* This website provides news content gathered from various internet sources. It is crucial to understand that we are not responsible for the accuracy, completeness, or reliability of the information presented Read More

Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.
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