Naturgy Set to Greenlight €2.3B Voluntary Buyout

Naturgy [NTGY.E] is expected to approve a voluntary buyout worth 2.3 billion EUR on Tuesday (25 March). The company aims to increase its free float and regain a spot in the MSCI indexes. 

The Spanish utility plans to offer 26.5 EUR per share, representing about 10% of its capital. It currently trades at around 25.1 EUR.

Key institutional shareholders have indicated proportional participation, bolstering the operation’s chances of success. The move would lift its free float to around 15% from the current 11%. 

Why Is This Important?

Since Naturgy was dropped from MSCI indexes about a year ago for not meeting free float criteria, some believe that a  successful buyout could pave the way for re-entry.

Moreover, the proposal will be voted on at the general shareholders’ meeting on Tuesday. If approved, it would mark a strategic step to boost liquidity. Shareholders will also consider paying an additional dividend of 0.6 EUR per share and amending the company’s bylaws to expand the board from 12 to 16 members.

A Buyout That’s the Latest Chapter in Naturgy’s Shareholder Web

The buyout proposal isn’t just about liquidity—it’s the latest move to untangle Naturgy’s complex ownership structure. 

The Criteria Caixa is Naturgy’s largest shareholder with a 26.7% stake, followed by investment funds CVC and GIP, holding 20.7% and 20.6%, respectively. The Australian investment fund IFM controls 16.9%, while Algeria’s state-owned Sonatrach owns 4.1%. The company’s treasury stock accounts for 0.9%, leaving the free float at just 10%—a key reason behind its MSCI exclusion last year. (Source: EFE)

Meanwhile, IFM joined Naturgy’s shareholder roster in 2021 with a 10.8% stake, later steadily increasing it to 16.9%.

The buyout follows a failed takeover attempt in June 2024 when Abu Dhabi’s Taqa sought to acquire 100% of Naturgy by purchasing stakes from GIP and CVC. Talks collapsed when Criteria Caixa, which manages assets for the “la Caixa” Foundation, refused to sell.

Is the MSCI Inclusion Critical to Naturgy's Market Appeal?

Naturgy’s exclusion from MSCI indexes in February 2024 hit its market profile hard, triggering a sell-off by passive funds and algorithmic investors, Chairman Francisco Reynés said during last year's shareholder meeting. 

The company’s free float has steadily dropped from 32% in 2016 to just 12% at the time of exclusion.

Reynés noted that being part of MSCI indexes is crucial for attracting both financial and algorithmic investors, as inclusion typically drives buying while exclusion triggers selling pressure. He attributed the over 24% drop in Naturgy’s share price at the start of 2024 to the MSCI decision.

Should shareholders approve the transaction, Naturgy will promptly seek regulatory approval from Spain’s financial markets regulator CNMV. The company aims for a green light by June to complete the process before the summer.

Naturgy’s 2025-2027 Strategic Plan

The buyout is the first step to kickstart Naturgy’s new strategic plan through 2027, which will be presented at the upcoming shareholders' meeting. 

Naturgy plans to invest 6.4 billion EUR over the next three years, with half of the funds earmarked for strengthening its network business and 30% allocated to renewable projects. The bulk of the investment—75%—will be focused on Spain.

Naturgy expects average annual EBITDA to reach around 5.3 billion EUR through 2027, while net profit is forecast to average 1.9 billion EUR  per year—figures broadly in line with its performance in 2023 and 2024. 

The company also plans to gradually raise its minimum dividend per share from 1.6 EUR in 2024 to 1.9 EUR by 2027.

With these measures, Naturgy aims to close the gap with peers like Iberdrola [BME: IBE], which has expanded 72.3% over the past five years and until the time of the writing, while Naturgy’s performance has lagged at 57.5%.

*Past performance does not reflect future results.

Conclusion 

The buyout marks a strategic push to strengthen Naturgy’s liquidity and set the stage for future investments, particularly in networks and renewables. 

By boosting its free float, the company aims to regain its spot in the MSCI indexes and attract institutional interest. However, challenges remain as Naturgy’s complex ownership structure continues to weigh on flexibility and market perception. 

Balancing shareholder dynamics will be key to unlocking sustained growth and long-term stability.