Ferrovial shareholders back plan to move to the Netherlands

Ferrovial, the Spanish infrastructure group, has won shareholder backing for a contentious plan to shift its head office to the Netherlands, a setback for the Spanish government that has condemned the proposed move.

The Madrid-based group, which sees the Dutch move as a stepping stone to listing its shares in New York, on Thursday won the support of a majority of voters at a shareholder meeting for a plan that it says will better align its corporate structure with its large North American business.

The proposal sparked a Spanish political storm earlier this year and made Ferrovial, part owner of London’s Heathrow airport, the latest European company to stir controversy by seeking to access the larger pool of capital in the US.

Ferrovial’s chair Rafael del Pino, the billionaire son of its founder, told shareholders the move would “bring the company closer to American investors and equity markets” and “promote its international growth”. Under the plan, Ferrovial would retain its listing in Madrid.

Del Pino has been encouraged by shareholders including Chris Hohn’s hedge fund TCI, which owns about 6 per cent of the €20bn company and says a US listing would broaden its investor base and boost its share price.

While Thursday’s vote overcomes a major hurdle for Ferrovial, its move to the Netherlands is still not guaranteed.

The plan could still be thwarted because the proposal to switch to the Netherlands included an opt out for investors who oppose the deal to sell their stock back to the company.

Ferrovial has said that if investors owning more than 2.5 per cent of the shares exercise this option then the move is off. Shareholders have until May 13 to decide.

Ferrovial, whose share price remains below its pre-pandemic peak, is particularly keen to be included in the Russell indices, which are tracked by funds managing billions of dollars. The company also contends that a Dutch base and US listing will lower its cost of capital.

Still, some analysts who follow the company say listing the shares on Wall Street will have limited significance for the company’s prospects.

The Spanish government, which reacted furiously to the plan and accused Ferrovial of betraying a country that had lavished it with public works contracts, says it is not seeking to thwart the company, but continues to criticise its move.

“Spain has always been our country and that will not change,” del Pino said.

Earlier this week, Gonzalo García, Spain’s secretary of state for the economy, told Ferrovial in a letter that the authorities had concluded there was no need for the company to move in order to list in the US.

Ferrovial disagrees, arguing there is no precedent for a Spanish company to list its share directly on the US stock markets.

The company says moving its HQ to the Netherlands will be “neutral” for its taxes and is not motivated by the personal interests of Del Pino, who owns 20 per cent of its shares via a Dutch entity, or anyone else.

It intends to shift its head office by merging its parent company into its wholly owned subsidiary Ferrovial International, which has been based in the Netherlands since 2018. If it encounters no further obstacles, the company wants to lists its shares in the US in the fourth quarter.

The company currently has more than 5,400 employees in Spain, nearly 4,200 in the US, and only a small office in the Netherlands. But last year it earned 82 per cent of its revenue outside Spain.

In addition to its 25 per cent stake in Heathrow airport, Ferrovial operates airports in Glasgow, Aberdeen and Southampton and manages a terminal of New York’s John F Kennedy airport. But the most valuable part of its business is its toll road division, which includes projects in the US, Canada, UK, Ireland, Slovakia and Australia.