FT: Temasek, Sinopec Eye Repsol Stake In Gas Natural

(RTTNews) - State-owned companies from China and Singapore have submitted expression of interest to acquire Spanish oil company Repsol SA's (REPYY) stake in Spanish natural gas utilities company Gas Natural SDG, S.A., according to a Financial Times report on Sunday. Repsol is expected to use the proceeds from the stake sale to boost its investment in oil exploration.

Singapore sovereign wealth fund Temasek Holdings and China's state-owned oil company Sinopec have separately said to have shown interest in acquiring the 24 percent of Repsol's 30 percent stake in Gas Natural that is valued at about 4.7 billion euros or $6.4 billion. Repsol intends to retain a six percent stake.

Barcelona, Spain-based Gas Natural primarily distributes natural gas in Spain, Italy and Latin America, as well as generates and commercializes electricity in the recently liberalized Spanish market as well as in Puerto Rico. Gas Natural's largest shareholders include the Spanish bank La Caixa and Repsol.

China's state-owned oil companies are scouting for new oil and gas assets amid rising demand from the world's second-largest economy. Beijing-based Sinopec is the largest producer and supplier of oil products in Asia.

Repsol had consulted its financial adviser Citigroup, Inc. (C) and Deutsche Bank AG (DB) on the possible stake sale and the two are assisting it in the process.

Both Temasek and Sinopec already have existing ties with the Spanish oil group, and Repsol's management is reportedly happy to associate with either of them on the stake sale. There are also other expressions of interest from other parties. Particularly, Temasek is a strategic investor in Repsol and reportedly holds a 6.3 percent stake in it.

Repsol began consulting its banks in early September to explore the possible sale of Gas Natural stake.

According to the FT report, Repsol has not made a final decision on whether it will sell or not and is not in an hurry. But, Repsol now views the stake as having less strategic importance, following the sale of its liquefied natural gas businesses to Royal Dutch Shell Plc. (RDS-A, RDSA.L, RDSB.L, RDS-B) in February.

In late February 2013, Royal Dutch Shell had agreed to acquire part of Repsol S.A's LNG portfolio outside of North America for a cash consideration of $4.4 billion.

REPYY closed Friday's regular trading session at $24.88, up $0.19 or 0.77% on a volume of 35,693 shares.