Repsol, Caixa Sell Gas Natural Stakes, End Pact
Repsol and Spanish investment fund Criteria Caixa have reached an agreement September 12 with a subsidiary of New York-based private equity fund Global Infrastructure Partners (GIP) to sell it a combined 20% stake in Spanish utility Gas Natural for €3.8bn.
GIP holds investments in international energy, airports, transport and water/waste sectors, including with Denmark's Dong in offshore wind power generation, and with US company Hess in the latter’s midstream oil and gas infrastructure assets in the Bakken Shale. It also has a 25% interest in Freeport LNG, Texas and 100% of Chesapeake Midstream Partners, the infrastructure arm that until 2012 belonged to US producer Chesapeake Corp.
Repsol and Criteria, the investment holding of mutually-run Catalan savings bank La Caixa, are each selling a 10% share for €1.9bn, based on a price of €19 per share. In their statements late September 12, Repsol said that represented a capital gain on the stake of some €246mn, while Criteria Caixa said it had made a capital gain of about €218mn.
"As a result .... Repsol and Criteria agree to terminate the agreement between Repsol and La Caixa regarding Gas Natural dated January 11, 2000," the two said in their statement. The two companies jointly ran Gas Natural under the aforementioned shareholders pact for 16 years, amended only three times since. But as the duo are agreeing to relinquish their controlling majority interest, the pact becomes no longer valid.
Once the 10% divestments are completed, Gas Natural’s principle shareholders will be Criterio Caixa 24.4%, Repsol 20%, GIP 20% and Algerian state gas and oil producer Sonatrach 4%.
Repsol is expected to use proceeds to reduce its debt; a year ago it announced plans to divest €6.2bn of assets by 2020, a target which it has either achieved early or is well on its way to doing so.
Closing of the sale is conditional upon the implementation of the certain corporate governance commitments by Gas Natural, and an amendment to its board of directors' regulations to require approval by two-thirds of the GN board on certain matters -- primarily, the acquisition or disposition of significant assets, the approval of the budget and strategic plan, the modification of its dividend policy or the entering into or the modification of material contracts.
Valuation at €19/share is less than the GN closing price on September 2 of €19.07/share, when reports of the deal began to surface. Some reports had suggested that GIP, or a rival fund Kohlberg Kravis Partners, might pay €4bn for the 20% stake.
Mark Smedley