Atlantia SpA to Discuss Agreement with ACS Actividades de Construccion y Servicios SA & Hochtief AG for a Joint Investment in Abertis Infraestructuras SA Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Vittorio Carelli - Banco Santander - Analyst : I have three questions. So the first one is on, as you mentioned, Mr. Castellucci, the Hochtief investment was quite a surprise to us. Was it because it has been [interpersonally] reluctant to adopt this integrated business model? So why was necessary for the agreement for a target investment in Hochtief? And just to have a balance sheet of 50%; and 50% would be enough, so why to invest in Hochtief to close the agreement? The second question is, actually, the accretion on the deal seems to be still there, probably a little bit lower, but the equity are unlevered; now it's very close to the equity IRR at which you have divested part of ASPI. So it seems that the deal structure, the deal features nowadays seems not to be very attractive as they were in the past. So why you did not decide to walk away, if the condition were these ones at the moment? without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. MARCH 15, 2018 / 5:15PM, ATL.MI - Atlantia SpA to Discuss Agreement with ACS Actividades de Construccion y Servicios SA & Hochtief AG for a Joint Investment in Abertis Infraestructuras SA Call And the last question is about Cellnex. You [saled] the asset a few years ago to the same company. And now you are probably willing to retain those towers again plus additional ones. So what has changed in your strategy regarding the towering business? Thank you.

Question: Nicol= Pessina - Mediobanca - Analyst : I would also have three. The first one again on Hochtief: is there any project currently in the portfolio of Hochtief that would be of interest for Atlantia? You mentioned WestConnex earlier. I'm wondering if you are also interested in bidding for the 50% stake of a project that is currently on sale, and then any potential other project that Hochtief is working on around the world. Second question about the industrial relations that you see between Atlantia and Abertis going forward. Do you think there will be any kind of geographic specialization? You mentioned some exchange earlier; does it mean there will be transfer of assets from one company to the other? And if you can give us an idea of which kind of transfers. without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. MARCH 15, 2018 / 5:15PM, ATL.MI - Atlantia SpA to Discuss Agreement with ACS Actividades de Construccion y Servicios SA & Hochtief AG for a Joint Investment in Abertis Infraestructuras SA Call And the last question is again on the construction and concession combined business. I'm wondering if you can give us some examples of what could be the advantage for Atlantia having adopted this business model. And what could be the advantage for a concessioner to be exposed also to construction? Thank you.

Question: Nicol= Pessina - Mediobanca - Analyst : Very clear. Many, many thanks.

Question: Elodie Rall - JPMorgan - Analyst : I have two questions, please. The first one is on dividends. So you confirmed dividend accretion; can you remind us what your commitment to dividend is from [noam] with this new deal? And the second question is on your long-term view and goal with regard to your ownership in Abertis. Do you think that this structure is going to be a long-term one? Or would you consider breaking up the asset with ACS going forward? Thank you.

Question: Elodie Rall - JPMorgan - Analyst : Okay, thanks.

Question: Stephanie D'Ath - RBC Capital Markets - Analyst : Just following up on the previous question on dividend, given you already increased the dividend substantially this year, am I right to understand that you plan to increase it another 30% next year, assuming the deal closes? Could you give us clarity or your estimate in terms of timing of the deal closure? And is Hochtief going to submit a new prospectus? And should we expect another few months for the CNMV to approve it? Regarding your net debt, so if we assume -- or, sorry, my question is other. To which the extent could you push your net debt to EBITDA up, especially regarding the comments you just made on Cellnex? Because if you decide to have over 30% of the Cellnex share, then it would trigger the obligation to offer the remaining shareholders to buy all the shares. And what's basically your M&A firepower left after consolidating your debt, Abertis' debt, the SPV debt, and the EUR6 billion that I assume you will issue in debt to pay for the Hochtief and SPV shares? without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. MARCH 15, 2018 / 5:15PM, ATL.MI - Atlantia SpA to Discuss Agreement with ACS Actividades de Construccion y Servicios SA & Hochtief AG for a Joint Investment in Abertis Infraestructuras SA Call

Question: Stefano Gamberini - Equita SIM - Analyst : A few questions, if I may. The first regarding the cost of debt. In the previous structure of the offer, one of the important part of the efficiency, in my view, was the cost of debt in the region of 1.6%, 1.9% for a period of seven years. Could you have something similar? And also the special-purpose vehicle could have the same cost of debt? Or do you see the risk that the cost, at the end of the day, will be higher? The second question regarding the structure of the new Atlantia Group. At the end of the day now, you are in Getlink, Hochtief, and Abertis under this structure. Do you think that this at least more complex than before, then it's more difficult to manage dividends in order to move these dividends towards the shareholder of Atlantia? Or even if with this structure, do you think that at the end the [leader] could get stuck in some way and transferred to the main shareholders, to -- sorry, the Atlantia shareholders? And then finally, do you see any risk that your offer on Abertis will not reach the 50%? That is one of the most important condition for the validity of the offer. And in this case, what could be your behavior? Many thanks.

Question: Thomas van der Meij - Kempen & Co. - Analyst : Two questions from my side. First on -- actually on Cellnex. It's rumored in the press that ultimately the Benetton family would acquire Cellnex. Is that one of the options you are considering? Or if you used the -- your option or you exercise your option, would that mean that you keep control of that stake? Secondly, you highlighted in your short presentation the strong corporate governance, and that you have to be close with the largest construction group to benefit from their expertise. But could you maybe elaborate on the decision process going forward? How is it going to work if they develop a greenfield development? Who has the right of first refusal? Is that Atlantia? Is that the Abertis vehicle? Or is that ultimately a third party? Thanks.

Question: Thomas van der Meij - Kempen & Co. - Analyst : Who has the right of first refusal? So if there's a greenfield development built by Hochtief, will that be sold ultimately to you guys, Atlantia directly, or to the Abertis vehicle? And how does it work? So who has the -- what is the order? What is the priority? Who has the priority?

Question: Thomas van der Meij - Kempen & Co. - Analyst : Just to summarize: is it right that if the Abertis vehicle will have the first right? And if they don't have the cash, then it's offered to Atlantia? without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. MARCH 15, 2018 / 5:15PM, ATL.MI - Atlantia SpA to Discuss Agreement with ACS Actividades de Construccion y Servicios SA & Hochtief AG for a Joint Investment in Abertis Infraestructuras SA Call

Question: James Barrow - BNP Paribas - Analyst : Just to stick on a couple of questions on the credit side of things. Just wonder if you could clarify a little bit about how you plan to fund the investment you yourselves, Atlantia, will be making in Hochtief and the new SPV; and then the SPV's funding itself. And then secondly, if you could talk a little bit about the potential credit rating impact, both at the Atlantia level and where you think the SPV would end up. And then finally, whether you might feel the need to take any measures to potentially mitigate the credit deterioration. I'm thinking hybrid capital potentially, or indeed asset sales. That's it. Thank you.

Question: Enrico Bartoli - MainFirst Bank - Analyst : Actually I have two. The first one is -- actually in your original offer, you were expecting to keep Abertis listed in the Spanish market. Now it seems that Hochtief will do whatever in order to even squeeze out possible minorities. Could you elaborate a bit the -- what change, what could be the advantage or disadvantages of the two options? And why, finally, the -- your and your partners decided to go for a possible delisting of Abertis? The second is relating to corporate governance. You explained what the market thinks in terms of advantages/disadvantages. I think that one key point for some investors is how the corporate governance is structured, the details of [what have adjusted]. If you can add some color on what you have in mind, particularly on the JV. I understand that the CEO is be appointed by you; the Chairman, by your partner. And in general, how detailed has been so far on the definition of the corporate governance; and, in particular, if you have already discussed possible rules for the way out? Thank you.

Question: Enrico Bartoli - MainFirst Bank - Analyst : Thank you.

Question: Vittorio Carelli - Banco Santander - Analyst : Apologies for the follow-up, Mr. Castellucci. One -- two questions. The first is do you feel any particular complexity discount coming forward in the valuation of the market on Atlantia, given the -- now that the Company is getting a little bit more complex? And second one: do you have any low cap on Hochtief shares? And that's it, thank you. Apologies for that.

Question: Stephanie D'Ath - RBC Capital Markets - Analyst : On the noncore assets of Abertis, could you maybe specify to make sure we understood well that you -- if you exercise your core option on Cellnex, Atlantia will hold it, and not the SPV? And if you could shed some light on what you intend to do with Cellnex. As earlier comment was that nothing had changed, and that you still intended to keep the noncore assets. And then regarding the debt structure at the SPV level, could you specify whether it will be of interest? And finally, assuming you want to stay between the 4.5%, 5% -- 5 times net debt to EBITDA you mentioned earlier, at the Atlantia level, is it fair to assume you don't have any pure M&A firepower at this point? Thank you.

Question: Stephanie D'Ath - RBC Capital Markets - Analyst : Sorry, just one more follow-up, please. On the squeeze out of the minorities, what have you decided if the Hochtief tender offer goes through at less than 90%? I don't believe you would be able to squeeze out the minorities. In that case, would you keep Abertis listed? And would it change anything on your side? Thank you. without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. MARCH 15, 2018 / 5:15PM, ATL.MI - Atlantia SpA to Discuss Agreement with ACS Actividades de Construccion y Servicios SA & Hochtief AG for a Joint Investment in Abertis Infraestructuras SA Call

Question: Stephanie D'Ath - RBC Capital Markets - Analyst : Thank you.

Question: Stefano Gamberini - Equita SIM - Analyst : Just a last follow-up regarding the synergies. Hochtief disclosed when they launched their bid an NPV the synergies and the region of EUR6 billion to EUR8 billion, mainly related to the greenfield project that they expected to develop at that time. You never actually disclosed a figure regarding the synergies that you expected from a potential deal with Abertis. Could you give us an idea what could be of the size of synergies? And where do you think that there are more relevant, considering the new structure that now you reach together with Hochtief?