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Spain to privatize lottery

InternationalInternational: Spain to privatize lottery

MADRID, Spain — The Spanish government is close to selecting three advisers to help it sell shares in national lottery Sociedad Estatal de Loterías y Apuestas del Estado SA that could raise as much as $10.62 billion.

The choice of strategic, financial and legal advisers could be announced as soon as Tuesday, Aurelio Martínez, chairman of Loterías y Apuestas del Estado, said in an interview. The mandates are considered prestigious for consulting firms, investment banks and law firms, even if the fees involved are relatively modest compared with that for banks that will help sell the initial public offering to investors.

Mr. Martínez said negotiations with advisers weren't finished. But a person familiar with the matter said Lazard Ltd. was likely to be named the company's financial adviser.

The Socialist government of José Luis Rodriguez Zapatero hopes to raise between €6.5 billion and €7.5 billion (US$9.20 billion and US$10.62 billion) by selling 30% of Loterías in the stock offering, Mr. Martinez said.

The sale could be the country's biggest IPO and one of the largest in Europe.

The deal is a key component of Spain's plan to cut its budget deficit to 6% of gross domestic product this year and to 4.4% in 2012. It was 9.2% in 2010. Besides Loterías, Spain will privatize its two largest airports, with the proceeds also going to pay down debt.

Investors are monitoring Spain's finances closely as the euro-zone sovereign-debt crisis rolls on. Greece, Ireland and Portugal have all been forced to accept financial-aid packages from the European Union and the International Monetary Fund after investors lost faith in the countries' ability to pay back fast-rising government debt.

Mr. Zapatero's government has pushed through reforms, cut public-sector wages and moved to shore up confidence in the country's banking industry, which suffered huge losses in the collapse of a decade-long real-estate boom.

Loterías may have a stock-market value of between €23 billion and €25 billion, making it the second-largest gaming company in the world by market capitalization, behind casino manager Las Vegas Sands Corp.

Loterías will meet with potential investors in September and October and aims for its shares to begin trading by the end of October, Mr. Martínez said.

The company has a near-monopoly on the lottery business in Spain, and is part of the country's Christmas festivities. Every Dec. 22, Spaniards gather around television screens to watch the winning numbers of an extraordinary lottery announced, or "sung," by kids from the San Ildefonso Catholic school in Madrid. The winning number is called El Gordo, or "the fat one." The ritual is repeated Jan. 6, but there the first prize is called El Niño, or "the boy."

Loterías is by far the largest of a raft of companies that are planning to test investors' appetite for Spanish assets this year. Loterías had just under €10 billion in revenue last year, and earnings before interest, taxes, depreciation and amortization of €3 billion.

Bankia and Banca Civica, two Spanish banks composed of merged savings banks, are aiming for mid-July listings, bankers say. Bankia this week is presenting itself to analysts, a key step in its IPO process. Banca Civica went through the same exercise two weeks ago. Bankia is seeking to raise between €3 billion and €4 billion, while Banca Civica hopes to raise between €800 million and €1 billion, according to people familiar with the matter.

In addition, Telefónica SA is looking to sell a large stake in its call-center unit, Atento, also before the market's traditional summer break in August.

Bankers say Loterías — which has no debt, generates a lot of cash, plans to pay rich dividends and has proved to be a relatively stable business throughout the downturn — will be an easier sell than the other IPOs that are coming to market.

"We've received a lot of interest, from sovereign-wealth funds and from others," Mr. Martínez said.

He said Loterías was unlikely to sell part of a company to another lottery operator, at least during the initial stage.

Once the lead advisers have been chosen, Loterías will select the top banks to manage the IPO, a role that many investment banks prefer because the fees are expected to be much higher than the roughly €600,000 that Loterias will pay its financial adviser.

If successful, the sale of Loterias would be bigger than the 2007 IPO of Iberdrola Renovables SA, which raised €4.5 billion. It would also be almost as large as the 2000 privatization of Swedish telecommunications giant Telia AB — now TeliaSonera AB — which brought in about €8 billion to the Swedish state coffers. Commodities giant Glencore International PLC last week raised $10 billion in London, in Europe's largest IPO to date, and that could increase to $11 billion if an option to sell more shares is exercised.

Wall Street Journal

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5 comments. Last comment 6 years ago by sully16.
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Harbinger
D.C./MD.
United States
Member #44103
July 30, 2006
5583 Posts
Offline
Posted: May 24, 2011, 8:00 am - IP Logged

The Spanish government is close to selecting three advisers to help it sell shares in national lottery Sociedad Estatal de Loterías y Apuestas del Estado SA that could raise as much as $10.62 billion.

The choice of strategic, financial and legal advisers could be announced as soon as Tuesday, Aurelio Martínez, chairman of Loterías y Apuestas del Estado, said in an interview. The mandates are considered prestigious for consulting firms, investment banks and law firms, even if the fees involved are relatively modest compared with that for banks that will help sell the initial public offering to investors.

Mr. Martínez said negotiations with advisers weren't finished. But a person familiar with the matter said Lazard Ltd. was likely to be named the company's financial adviser.

The Socialist government of José Luis Rodriguez Zapatero hopes to raise between €6.5 billion and €7.5 billion (US$9.20 billion and US$10.62 billion) by selling 30% of Loterías in the stock offering, Mr. Martinez said.

The sale could be the country's biggest IPO and one of the largest in Europe.

The deal is a key component of Spain's plan to cut its budget deficit to 6% of gross domestic product this year and to 4.4% in 2012. It was 9.2% in 2010. Besides Loterías, Spain will privatize its two largest airports, with the proceeds also going to pay down debt.

Investors are monitoring Spain's finances closely as the euro-zone sovereign-debt crisis rolls on. Greece, Ireland and Portugal have all been forced to accept financial-aid packages from the European Union and the International Monetary Fund after investors lost faith in the countries' ability to pay back fast-rising government debt.

Mr. Zapatero's government has pushed through reforms, cut public-sector wages and moved to shore up confidence in the country's banking industry, which suffered huge losses in the collapse of a decade-long real-estate boom.

Loterías may have a stock-market value of between €23 billion and €25 billion, making it the second-largest gaming company in the world by market capitalization, behind casino manager Las Vegas Sands Corp.

Loterías will meet with potential investors in September and October and aims for its shares to begin trading by the end of October, Mr. Martínez said.

The company has a near-monopoly on the lottery business in Spain, and is part of the country's Christmas festivities. Every Dec. 22, Spaniards gather around television screens to watch the winning numbers of an extraordinary lottery announced, or "sung," by kids from the San Ildefonso Catholic school in Madrid. The winning number is called El Gordo, or "the fat one." The ritual is repeated Jan. 6, but there the first prize is called El Niño, or "the boy."

Loterías is by far the largest of a raft of companies that are planning to test investors' appetite for Spanish assets this year. Loterías had just under €10 billion in revenue last year, and earnings before interest, taxes, depreciation and amortization of €3 billion.

Bankia and Banca Civica, two Spanish banks composed of merged savings banks, are aiming for mid-July listings, bankers say. Bankia this week is presenting itself to analysts, a key step in its IPO process. Banca Civica went through the same exercise two weeks ago. Bankia is seeking to raise between €3 billion and €4 billion, while Banca Civica hopes to raise between €800 million and €1 billion, according to people familiar with the matter.

In addition, Telefónica SA is looking to sell a large stake in its call-center unit, Atento, also before the market's traditional summer break in August.

Bankers say Loterías — which has no debt, generates a lot of cash, plans to pay rich dividends and has proved to be a relatively stable business throughout the downturn — will be an easier sell than the other IPOs that are coming to market.

"We've received a lot of interest, from sovereign-wealth funds and from others," Mr. Martínez said.

He said Loterías was unlikely to sell part of a company to another lottery operator, at least during the initial stage.

Once the lead advisers have been chosen, Loterías will select the top banks to manage the IPO, a role that many investment banks prefer because the fees are expected to be much higher than the roughly €600,000 that Loterias will pay its financial adviser.

If successful, the sale of Loterias would be bigger than the 2007 IPO of Iberdrola Renovables SA, which raised €4.5 billion. It would also be almost as large as the 2000 privatization of Swedish telecommunications giant Telia AB — now TeliaSonera AB — which brought in about €8 billion to the Swedish state coffers. Commodities giant Glencore International PLC last week raised $10 billion in London, in Europe's largest IPO to date, and that could increase to $11 billion if an option to sell more shares is exercised.

The socialists are going for the capitalists' evil plan of making mo' money.

Zapatero is going bye-bye soon.  The popular party made massive gains (the Popular party in Spain are the conservatives (repubs)) they are getting with the program like the rest of Europe and getting rid of the cancerous socialists.

Hurray!

    rdgrnr's avatar - walt
    Way back up in them dadgum hills, son!
    United States
    Member #73904
    April 28, 2009
    14903 Posts
    Offline
    Posted: May 24, 2011, 9:54 am - IP Logged

    The socialists are going for the capitalists' evil plan of making mo' money.

    Zapatero is going bye-bye soon.  The popular party made massive gains (the Popular party in Spain are the conservatives (repubs)) they are getting with the program like the rest of Europe and getting rid of the cancerous socialists.

    Hurray!

    And here, our guy wants to give socialism one more chance after it's failed everywhere else.

    He's so gutsy!


                                                 
                         
                                             

     

     

     

     

                                                                                                       

    "The only thing necessary for evil to triumph is for good men to do nothing"

                                                                                                --Edmund Burke

     

     

      Avatar

      Honduras
      Member #20982
      August 29, 2005
      4715 Posts
      Offline
      Posted: May 25, 2011, 10:47 pm - IP Logged

      How about this if they havent tried it already...This is also for the USA government...About Privatizing a company, just trying to help...Lets say a company costs: $5 Billion you sell it for $8 Billion to the company whose buying it but you dont sell it entirely instead you lease it to the private company for 1 or 2 of decades or whatever the period....You then take: $3 Billion from the 8 Billion and you buy STAKES/SHARES IN THE COMPANY after it became privatized that way the government might make like 25% of every dollar of profit that the private company will be making plus it keeps the $5 Billion that the company was worthed + it will get the company back after a couple of decades....If you want to sell it is up to you i was saying to lease it better...

      that´s if they havent tried it already....

      The Forex trades: 1.6 Trillion dollars EVERY day, that´s more than the GDP of the Carribbean Central America, COMBINED. Enough to feed every crook out there for centuries...To all Geniuses & Powers Countries of the World the Planet needs breakthroughs in all Medicine, Veterinary, Biology related fields, Psychology, Population Psychology/Sociology..They need to genetically ingeneer new plants species/types to give more variety of plants and thus have more resources for combating diseases¨


       


       


       

       


        rdgrnr's avatar - walt
        Way back up in them dadgum hills, son!
        United States
        Member #73904
        April 28, 2009
        14903 Posts
        Offline
        Posted: May 25, 2011, 11:09 pm - IP Logged

        How about this if they havent tried it already...This is also for the USA government...About Privatizing a company, just trying to help...Lets say a company costs: $5 Billion you sell it for $8 Billion to the company whose buying it but you dont sell it entirely instead you lease it to the private company for 1 or 2 of decades or whatever the period....You then take: $3 Billion from the 8 Billion and you buy STAKES/SHARES IN THE COMPANY after it became privatized that way the government might make like 25% of every dollar of profit that the private company will be making plus it keeps the $5 Billion that the company was worthed + it will get the company back after a couple of decades....If you want to sell it is up to you i was saying to lease it better...

        that´s if they havent tried it already....

        Whenever government gets involved in the private sector it always turns into a nightmare. That's what Europe and the world have found out the hard way. Socialism just doesn't work in a practical sense or any other sense. It's a disaster.

        But our leader wants to give it another chance even if it destroys us - which it would. 

        Bureaucrats just love to stick their nose in where it doesn't belong and tell educated and experienced people how to run their businesses when they themselves have no idea what the hell they're doing.

        It's the nature of the beast.


                                                     
                             
                                                 

         

         

         

         

                                                                                                           

        "The only thing necessary for evil to triumph is for good men to do nothing"

                                                                                                    --Edmund Burke

         

         

          sully16's avatar - sharan
          Ringleader
          Michigan
          United States
          Member #81740
          October 28, 2009
          40581 Posts
          Online
          Posted: May 26, 2011, 9:03 am - IP Logged

          Whenever government gets involved in the private sector it always turns into a nightmare. That's what Europe and the world have found out the hard way. Socialism just doesn't work in a practical sense or any other sense. It's a disaster.

          But our leader wants to give it another chance even if it destroys us - which it would. 

          Bureaucrats just love to stick their nose in where it doesn't belong and tell educated and experienced people how to run their businesses when they themselves have no idea what the hell they're doing.

          It's the nature of the beast.

          Couldn't agree more, when people have the right to make their own choices, good or bad, they will prosper.

          Because even when you make a mistake, if you learn from it, it makes you smarter.

          Did you exchange a walk on part in the war ?

          For a lead role in a cage?

           

                                                      From Pink Floyd's " Wish you were here"