Nobody expects the Spanish Acquisition!
Leader of the Spanish acquisition
19 February 2006
The Business online.com
Copyright 2006
The man who wants to buy Britain’s airports aims to keep his father’s business legacy flying high
The top brass at BAA should certainly be feeling nervous: if there were anyone actually born to buy Britain’s airport giant, it is Rafael del Pino, chairman of Spanish construction company Ferrovial. The eldest son of Ferrovial’s founder, Rafael del Pino senior, Spain’s second richest man, it sometimes seems young Rafael has been groomed for the task his entire life.
His training, from his civil engineering degree at the prestigious Escuela de Caminos and the MBA he took at Massachusetts Institute of Technology’s Sloan School of Management to his stint with the Boston Consulting Group in Paris, all points in one direction. It is to take the company his father built over 50 years in Spain and Latin America – starting by laying rail tracks and ending by building Bilbao’s shimmering Guggenheim Museum – and turn it into global construction giant big enough to rival anything internationally.
Del Pino senior’s charitable foundation aims to build Spain’s future leaders in everything from business to the media and politics, with the aim of spreading Spain’s influence abroad. His son is arguably his biggest project. In interviews, Del Pino junior has speculated about the big deal which could transform the company. A bid for BAA, which including debt could be worth £15bn (E21.9bn, $26bn) and may arrive within weeks, fits the criteria. A Spanish analyst says: “He was born rich, but having been born rich, as opposed to just lying in the sun and taking advantage, he’s aiming to replicate what his father did at a different scale. He’s aiming to build one of the largest construction companies in Europe.”
Anyone in BAA’s executive offices hoping that the Del Pino line has shed some business acumen in jumping a generation risks being proved very wrong indeed.
One UK financier who was pulled in to meet Del Pino a year ago says: “I went in thinking, ‘this is just the son of the guy who started everything’, and went away thinking, ‘this is one of the leaders in the European infrastructure business’. He’s incredibly smart.”
Another analyst adds: “The MBA in the States – with all his wealth, he didn’t really need to do it. We all remember his father, but he wants to be remembered as a tycoon as well.”
Del Pino, 48, is more introverted than his father and intensely shy of media scrutiny. But those who have dealt with him say he is charming in person, with only a trace of a Spanish accent. He has a way with probing questions that allows him to soak up far more about others than he gives away about himself, and a direct style unusual among Spanish businessmen.
His outlook is doggedly global, and he devoted far more of his time scrutinising international opportunities than managing the company’s Spanish businesses. His father remains his mentor, Del Pino admitted to a Spanish newspaper a few years ago. There have unsurprisingly been some past differences of opinion, he said, especially given his father’s control of the family’s 58% stake. He told an interviewer a few years ago: “You have to make the most of the advantages of being ‘the son of’, and put up with the inconveniences.”
After serving as an artillery officer in the civil war, aged 17, Del Pino senior, now 86, also trained as a civil engineer at the elite Escuela de Caminos, along with many of the older generation of Spain’s business leaders. After travelling Europe picking up building techniques, he became known as “El Rey de Los Ladrillos” – the king of bricks.
“I doubt there are many people who have worked as hard as me,” he mused on retirement in 2000. “There may be some, but not many.”
The company expanded rapidly, taking advantage of Spain’s post-war reconstruction, and also picking up contracts to build motorways in North Africa and Latin America.
He says: “When one is beginning, one has to sweep the floors if necessary. You also have to know how to be humble. The leadership comes later.”
The son did exactly that, working on a Ferrovial project in Libya in 1983 in his first job for the company, before being promoted to chief executive in 1992 and taking control in 2000.
His brother Fernando and sister Maria sit on the Ferrovial board, but it has always been Rafael, the oldest, who was groomed to take over. A widower, his chief concern beyond building the business, is his three sons. He enjoys anything that takes him away from the world of business and into confrontation with the elements. In 2002, the four of them took their yacht across the Atlantic, a trip, Del Pino proudly recalls, that saw them braving Force 6 gales.
He’s also keen on cross-country skiing, decking out his skis with skins and pushing off into the unknown, although he complains that in the 15 times he’s visited the World Economic Forum in Davos, he’s only managed to make it to the slopes five times.
In his business life, though, Ferrovial’s bid for BAA is his biggest challenge. Ferrovial, with a market value of E9bn, is taking on a company with a market value of around £8.5bn. Del Pino is putting on the table everything his father painstakingly built up over 50 years.
That doesn’t surprise anyone in Spain. One analyst says: “He’s not managing this as a standard family company that doesn’t want to take risks.”
Del Pino junior proved this as far back as 1999 when he pushed hard to encourage his father to outbid Australia’s Macquarie Group in the $2.1bn deal to own and operate Highway 407, a 99-year lease for a toll road in Toronto, Canada. “People thought it was crazy,” says one analyst, “but it is one of the most profitable things they did.”
It was the son, rather than his father, who first realised the potential for infrastructure investments. Allan Moss, the boss of Australian bank Macquarie, is credited with the realisation in the 1990s that infrastructure such as roads, airports and utilities was perfectly matched to the investment needs of pension funds. But Del Pino was not far behind in seeing the opportunities this could bring the construction and asset management firms that partnered them. Ontario Teachers’ Pension Plan was a long-term investor in Macquarie’s funds, but Ferrovial has typically worked with the Francophone Caisse de Dépot et Placement du Québec, who backed them on the Highway 407 deal, and are reportedly the main backer on BAA.
Del Pino junior was also the moving force behind taking Ferrovial public back in 2000. Again, the move looked rocky at the time, as the shares halved from E22.85 to E13 once they hit the market, prompting accusations that the Del Pinos had been too greedy. But with the shares now trading above E64, Del Pino’s pricing looks entirely justified. His father may have built the company, but its share price has nearly tripled under the son’s tenure.
His father’s management style was based on force of personality, the son in contrast likes to give his managers a freer rein, fostering an entrepreneurial culture. Analysts say he shares his power with chief executive Joaquin Ayuso, vice chairman Santiago Bergareche, and chief financial officer Nicolas Villen. They, in turn, give considerable autonomy to the heads of the company’s four arms – construction, infrastructure, real estate and services.
Ferrovial has shown it can operate in the UK market. It has bought 50% stakes in Bristol and Belfast airports and bought UK construction firm Amey, turning the company around and gaining a stake in the Tube Lines consortium redeveloping the London Underground. It also has a contract to build schools in Bradford.
Elsewhere, its biggest investments have been done through its separately listed toll road subsidiary Cintra. The group has a 99-year concession to operate the Chicago Skyway and was this year awarded, in partnership with the Macquarie Infrastructure Group, a 75-year concession on the Indiana Toll Road. Cintra is also developing, with the state of Texas, a new cross-state corridor. Last year Ferrovial also bought Swissport International, the airport handling company that operates in more than 180 airports worldwide.
Although Del Pino senior’s life stands as one of the Spanish business world’s most striking success stories, his last years have been fraught with tragedy. He captured Spain’s imagination on retirement with his plans to retrace Jules Verne’s voyage around the world on his E12m luxury yacht Alcor, flying in friends to accompany him for the various legs of the trip. Articles compared the then 82-year-old adventurer to Magellan. But the trip was tragically cut short when he was left paralysed by a fall on board.
Now, his ambitions for his retirement sadly curtailed, his hopes are on his son’s efforts to take his legacy onwards. For the Del Pinos, BAA is more than just a deal.
© 2006 The Business thebusinessonline.com
19 February 2006
The Business online.com
Copyright 2006
The man who wants to buy Britain’s airports aims to keep his father’s business legacy flying high
The top brass at BAA should certainly be feeling nervous: if there were anyone actually born to buy Britain’s airport giant, it is Rafael del Pino, chairman of Spanish construction company Ferrovial. The eldest son of Ferrovial’s founder, Rafael del Pino senior, Spain’s second richest man, it sometimes seems young Rafael has been groomed for the task his entire life.
His training, from his civil engineering degree at the prestigious Escuela de Caminos and the MBA he took at Massachusetts Institute of Technology’s Sloan School of Management to his stint with the Boston Consulting Group in Paris, all points in one direction. It is to take the company his father built over 50 years in Spain and Latin America – starting by laying rail tracks and ending by building Bilbao’s shimmering Guggenheim Museum – and turn it into global construction giant big enough to rival anything internationally.
Del Pino senior’s charitable foundation aims to build Spain’s future leaders in everything from business to the media and politics, with the aim of spreading Spain’s influence abroad. His son is arguably his biggest project. In interviews, Del Pino junior has speculated about the big deal which could transform the company. A bid for BAA, which including debt could be worth £15bn (E21.9bn, $26bn) and may arrive within weeks, fits the criteria. A Spanish analyst says: “He was born rich, but having been born rich, as opposed to just lying in the sun and taking advantage, he’s aiming to replicate what his father did at a different scale. He’s aiming to build one of the largest construction companies in Europe.”
Anyone in BAA’s executive offices hoping that the Del Pino line has shed some business acumen in jumping a generation risks being proved very wrong indeed.
One UK financier who was pulled in to meet Del Pino a year ago says: “I went in thinking, ‘this is just the son of the guy who started everything’, and went away thinking, ‘this is one of the leaders in the European infrastructure business’. He’s incredibly smart.”
Another analyst adds: “The MBA in the States – with all his wealth, he didn’t really need to do it. We all remember his father, but he wants to be remembered as a tycoon as well.”
Del Pino, 48, is more introverted than his father and intensely shy of media scrutiny. But those who have dealt with him say he is charming in person, with only a trace of a Spanish accent. He has a way with probing questions that allows him to soak up far more about others than he gives away about himself, and a direct style unusual among Spanish businessmen.
His outlook is doggedly global, and he devoted far more of his time scrutinising international opportunities than managing the company’s Spanish businesses. His father remains his mentor, Del Pino admitted to a Spanish newspaper a few years ago. There have unsurprisingly been some past differences of opinion, he said, especially given his father’s control of the family’s 58% stake. He told an interviewer a few years ago: “You have to make the most of the advantages of being ‘the son of’, and put up with the inconveniences.”
After serving as an artillery officer in the civil war, aged 17, Del Pino senior, now 86, also trained as a civil engineer at the elite Escuela de Caminos, along with many of the older generation of Spain’s business leaders. After travelling Europe picking up building techniques, he became known as “El Rey de Los Ladrillos” – the king of bricks.
“I doubt there are many people who have worked as hard as me,” he mused on retirement in 2000. “There may be some, but not many.”
The company expanded rapidly, taking advantage of Spain’s post-war reconstruction, and also picking up contracts to build motorways in North Africa and Latin America.
He says: “When one is beginning, one has to sweep the floors if necessary. You also have to know how to be humble. The leadership comes later.”
The son did exactly that, working on a Ferrovial project in Libya in 1983 in his first job for the company, before being promoted to chief executive in 1992 and taking control in 2000.
His brother Fernando and sister Maria sit on the Ferrovial board, but it has always been Rafael, the oldest, who was groomed to take over. A widower, his chief concern beyond building the business, is his three sons. He enjoys anything that takes him away from the world of business and into confrontation with the elements. In 2002, the four of them took their yacht across the Atlantic, a trip, Del Pino proudly recalls, that saw them braving Force 6 gales.
He’s also keen on cross-country skiing, decking out his skis with skins and pushing off into the unknown, although he complains that in the 15 times he’s visited the World Economic Forum in Davos, he’s only managed to make it to the slopes five times.
In his business life, though, Ferrovial’s bid for BAA is his biggest challenge. Ferrovial, with a market value of E9bn, is taking on a company with a market value of around £8.5bn. Del Pino is putting on the table everything his father painstakingly built up over 50 years.
That doesn’t surprise anyone in Spain. One analyst says: “He’s not managing this as a standard family company that doesn’t want to take risks.”
Del Pino junior proved this as far back as 1999 when he pushed hard to encourage his father to outbid Australia’s Macquarie Group in the $2.1bn deal to own and operate Highway 407, a 99-year lease for a toll road in Toronto, Canada. “People thought it was crazy,” says one analyst, “but it is one of the most profitable things they did.”
It was the son, rather than his father, who first realised the potential for infrastructure investments. Allan Moss, the boss of Australian bank Macquarie, is credited with the realisation in the 1990s that infrastructure such as roads, airports and utilities was perfectly matched to the investment needs of pension funds. But Del Pino was not far behind in seeing the opportunities this could bring the construction and asset management firms that partnered them. Ontario Teachers’ Pension Plan was a long-term investor in Macquarie’s funds, but Ferrovial has typically worked with the Francophone Caisse de Dépot et Placement du Québec, who backed them on the Highway 407 deal, and are reportedly the main backer on BAA.
Del Pino junior was also the moving force behind taking Ferrovial public back in 2000. Again, the move looked rocky at the time, as the shares halved from E22.85 to E13 once they hit the market, prompting accusations that the Del Pinos had been too greedy. But with the shares now trading above E64, Del Pino’s pricing looks entirely justified. His father may have built the company, but its share price has nearly tripled under the son’s tenure.
His father’s management style was based on force of personality, the son in contrast likes to give his managers a freer rein, fostering an entrepreneurial culture. Analysts say he shares his power with chief executive Joaquin Ayuso, vice chairman Santiago Bergareche, and chief financial officer Nicolas Villen. They, in turn, give considerable autonomy to the heads of the company’s four arms – construction, infrastructure, real estate and services.
Ferrovial has shown it can operate in the UK market. It has bought 50% stakes in Bristol and Belfast airports and bought UK construction firm Amey, turning the company around and gaining a stake in the Tube Lines consortium redeveloping the London Underground. It also has a contract to build schools in Bradford.
Elsewhere, its biggest investments have been done through its separately listed toll road subsidiary Cintra. The group has a 99-year concession to operate the Chicago Skyway and was this year awarded, in partnership with the Macquarie Infrastructure Group, a 75-year concession on the Indiana Toll Road. Cintra is also developing, with the state of Texas, a new cross-state corridor. Last year Ferrovial also bought Swissport International, the airport handling company that operates in more than 180 airports worldwide.
Although Del Pino senior’s life stands as one of the Spanish business world’s most striking success stories, his last years have been fraught with tragedy. He captured Spain’s imagination on retirement with his plans to retrace Jules Verne’s voyage around the world on his E12m luxury yacht Alcor, flying in friends to accompany him for the various legs of the trip. Articles compared the then 82-year-old adventurer to Magellan. But the trip was tragically cut short when he was left paralysed by a fall on board.
Now, his ambitions for his retirement sadly curtailed, his hopes are on his son’s efforts to take his legacy onwards. For the Del Pinos, BAA is more than just a deal.
© 2006 The Business
posted by Porkus Maximus Tex: at Saturday, February 18, 2006
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