In recent times, hardly anything ever happens in the Spanish stock market. There are practically no IPOs or shareholder squabbles to attract investors’ attention. So when there is even a slight movement, like the possible sale of 20% of Gas Natural by majority shareholders Repsol and La Caixa, it shakes the market up more than normal.
The Ibex 35 index was like a helter skelter ride on Thursday. It rose over 1.5%, with intra-day levels exceeding those prior to Brexit, only to close a mere 0.5% higher, below 8.800 points. It’s not enough, but at least it is the third consecutive day of gains.
Gas Natural shares increased their value by more than 4.5%, finally closing up 3% (the company’s stock market value is now over 19 billion euros). Repsol and Caixabank shares also initially rose over 1%, but lost momentum over the session.
Repsol and Criteria, the holding company owned by La Caixa, are negotiating the sale of 20% of their total stake in Gas Natural with the fund Global Infraestructure Partners, which has been very active in Spain’s energy sector in recent times. Both companies have acknowledged to Spain’s stock market regulator CNMV that they are contact with investors, but they have not provided the names of the funds and insist that nothing has yet been decided. But the market is already discounting that the deal will take place before year-end.
Repsol has said that the possible sale is part of its 2016-2020 Strategic Plan, “and as part of a continual process of managing our business portfolio in a dynamic way, Repsol is analysing different alternatives including those related to its stake in Gas Natural.”
Criteria currently holds 34.4% of Gas Natural shares, so a possible sale would cut this stake to 24.4%. Repsol controls 30%, which would be reduced to 20%. The two firms have a management agreement for the gas company subject to various conditions. These include holding on to over 50% of the shares between them. If this operation finally happens, the syndication pact would need to be restructured.
One of the main attractions of Gas Natural is its dividend policy. Last year, Repsol and Criteria pocketed 640 million euros each in dividends. The gas company has announced plans to increase the amount of earnings it earmarks for dividends in the future.