Bloomberg News

Repsol Rises to Four-Week High in Madrid on Stake Increase

August 30, 2011

(Updates with closing share price in second paragraph.)

Aug. 30 (Bloomberg) -- Repsol YPF SA, Spain’s largest oil company, rose to the highest in almost four weeks in Madrid on plans by Petroleos Mexicanos to boost its stake and join with the producer’s biggest shareholder to restructure management.

Repsol climbed 4.2 percent to 19.68 euros, the highest closing price since Aug. 3. Pemex, as the Mexican state-owned oil producer is known, will boost its stake by 5 percent after agreeing to vote as a bloc with Repsol shareholder Sacyr Vallehermoso SA. Sacyr jumped 12 percent to 5.26 euros.

Within 30 days, the two will hold a combined 29.8 percent, short of the 30 percent trigger for a takeover bid under Spanish law. They will gain board seats and aim to split the chairman and chief executive officer roles now held by Antonio Brufau.

“The deal is positive news for Repsol shares,” Stuart Joyner, an analyst at Investec Securities, said in London. “Brufau will stay as an executive in Repsol as he is very well- regarded but we’ll see the CEO and chairman roles split early next year. Having a relationship with Pemex is a strong step farther into Mexico and Latin America.”

Repsol management will watch out for the interests of all its investors, said a spokesman who asked not to be identified in line with company policy. He said the pact excludes the majority of shareholders. Sacyr and Pemex said in a statement yesterday that Repsol wasn’t “appropriately valued.”

Refinancing the Loan

Repsol is trading at about 2.6 times earnings before interest, tax, depreciation and amortization, compared with an Ebitda multiple of 7.1 for the Stoxx 600 Oil & Gas index, according to data compiled by Bloomberg from the latest earnings filings. Galp Energia SGPS SA, Portugal’s biggest oil company, trades at 12.7 times Ebitda.

The current dividend yield of Repsol is 5.6 percent, more than twice the average 2.7 percent of the index, the data show.

By the end of the year, Sacyr must refinance a 4.9 billion- euro loan to fund the purchase of its stake in Repsol.

“The banks behind the loan will look positively at the refinancing now as Sacyr may influence decisions such as increasing the dividend in the long term,” Daniel Gandoy, an analyst at Banco BPI, said by phone. “Brufau may have to split his role as top manager and lose some of his power.”

CaixaBank, the commercial lender owned by La Caixa, has 13 percent of Repsol. Pemex will raise its stake to 9.8 percent, while Sacyr, a Spanish builder, will maintain 20 percent. Caixabank will set out its response to the pact when the Repsol board meets, the bank said in a regulatory filing today.

--With assistance from Emma Ross-Thomas and Ben Sills in Madrid and Carlos Manuel Rodriguez in Mexico City. Editors: Tony Barrett,

To contact the reporters on this story: Emma Ross-Thomas in Madrid at; Manuel Baigorri in Madrid at

To contact the editor responsible for this story: Craig Stirling at

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