Bloomberg News

Sacyr Fires Del Rivero After CEO ‘Betrays’ Him Over Repsol

October 21, 2011

(Updates with details of meeting in seventh paragraph.)

Oct. 21 (Bloomberg) -- Sacyr Vallehermoso SA’s board ousted Chairman Luis Del Rivero after he led the construction company into a battle with Repsol YPF SA, its biggest investment and Spain’s largest oil company.

Del Rivero, 62, will be replaced by Chief Executive Officer Manuel Manrique, the company said in a statement yesterday. Demetrio Carceller, Sacyr’s biggest shareholder, will join Juan Abello as co-vice chairman.

“It was an ‘et tu Brute’ moment,” said Lorenzo Bernaldo de Quiros, an economist and former adviser to the Spanish government. “Manrique has betrayed him.”

The board turned on Del Rivero after he forged an alliance with Petroleos Mexicanos to wring more dividend payments and earnings from Repsol. Sacyr is battling to shore up its finances and pay back a 4.9 billion-euro ($6.7 billion) loan that financed its 20 percent stake in the oil company.

Repsol’s shares had risen 13 percent in the four days after the Aug. 29 announcement of the accord with the Mexican state oil company Petroleos Mexicanos, known as Pemex, their biggest four-day gain in more than two years.

Today they dropped as much as 3.4 percent in Madrid as the Stoxx 600 Oil & Gas index rose 1.1 percent. The Pemex deal is likely to be dissolved and Manrique will look to sell part of Sacyr’s Repsol stake to ease the refinancing of its loan, Bernaldo de Quiros said after speaking to a board member. Twenty percent of Repsol is worth about 5.2 billion euros.

Sacyr Shares Climb

Manrique and Carceller met today with Chairman Antonio Brufau of Repsol, at the oil company’s Madrid headquarters, Repsol spokesman Kristian Rix said. He declined to give details of what was discussed.

Sacyr shares climbed 2.3 percent to 5.557 euros as of 3:04 p.m. in Madrid.

Shareholders including Novacaixagalicia, the Spanish savings bank that owns 8.75 percent of Sacyr, urged Del Rivero to back down from the confrontation, arguing that would increase his chances of boosting dividend income.

The accord with Pemex aimed to boost earnings, raise the Repsol share price, and to install a chief executive officer to dilute Brufau’s power at the company, where he was also CEO.

Repsol Dividend

Del Rivero had been calling on Brufau to raise the Repsol dividend since a series of press interviews in December 2009. In an interview in El Mundo, he also urged the Repsol chairman to divest assets including a 30 percent holding in a Brazilian refinery and sell a stake in the company’s oil discoveries in the country.

“I’m just a small-time capitalist and that can lead to clashes with some people,” he told the newspaper.

The assault on Repsol was just the latest in a series of raids Sacyr carried out under Del Rivero.

He announced a plan to build a 3 percent stake in Banco Bilbao Vizcaya Argentaria SA in November 2004, months after the Socialist government of Jose Luis Rodriguez Zapatero came to power. BBVA rejected his request for a board seat even though then-Finance Minister Pedro Solbes said the plan “makes some sense.”

Del Rivero dropped his plan the following February and booked a gain of 149 million euros from selling options and shares in the lender.

He also abandoned a bid to take over French builder Eiffage SA in April 2008 after amassing a 33 percent stake. Minority shareholders complained that Del Rivero bent the rules that should have forced a formal takeover offer and a French securities regulator found Del Rivero guilty of colluding with other investors to dodge the takeover rules.

Yesterday, Del Rivero, who holds 13 percent of Sacyr, announced a pact with two other shareholders to vote as a block controlling 27 percent of the company in a last-ditch attempt to shore up his position. It wasn’t enough.

“In his desperation to save his position he’s created a series of enemies and they have ended up destroying him,” said Bernaldo de Quiros.

--Editors: Alex Devine, Stephen Cunningham

To contact the reporter on this story: Ben Sills in Madrid at

To contact the editor responsible for this story: Reed Landberg at

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