Thursday, July 19, 2007

Goldman Sachs and ICA are high bidders on toll roads in Mexico

ICA, Goldman Sachs Bid $4.1 Billion for Mexican Road


By Valerie Rota and Adriana Arai
Copuyright 2007

Empresas ICA SAB, Mexico's largest construction company, offered 44.1 billion pesos ($4.1 billion) in a joint bid with a Goldman Sachs Group Inc. fund for the right to run four toll roads in Mexico. ICA shares had their biggest gain in more than a year.

The bid for the 30-year contracts to run 548 kilometers (340 miles) of roads was the highest of six offers, Mexico City-based ICA said in a filing with the U.S. Securities and Exchange Commission. The Mexican government will announce the winning bid Aug. 6, ICA said.

ICA shares surged on anticipation the company will be declared the winner, outbidding rivals including billionaire Carlos Slim's Impulsora del Desarrollo y el Empleo en America Latina SA and Brisa-Auto Estradas de Portugal SA, Portugal's biggest highway operator.

"They won,'' said Carlos Gonzalez, an equity analyst with IXE Grupo Financiero SA in an interview from Mexico City.

Gonzalez, who has a "buy'' rating on ICA's shares, said the company is set to benefit from President Felipe Calderon's plan to boost spending on infrastructure during his administration.

Communications and Transportation Minister Luis Tellez yesterday said the government's goal is to raise 287 billion pesos to build and upgrade highways by 2012, with funds coming from the government and private companies.

Calderon's infrastructure plan is very aggressive,'' Gonzalez said. "This is excellent news for every construction company.''

Shares of Mexico City-based ICA gained 4.83 pesos, or 7.5 percent, to 69.46 pesos in Mexico City, the biggest gain since May 31, 2006.

ICA said the offer was a joint bid with Goldman Sachs Infrastructure Partners I. Goldman Sachs has a 12 percent stake in the $6.5 billion infrastructure fund, said spokesman Michael DuVally, who confirmed that the joint bid was the highest.

To contact the reporters on this story: Valerie Rota in Mexico City at ; Adriana Arai in Mexico City at

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