LONDON: Vitol Group, the world’s largest independent oil trader, is among firms considering bids for Spanish oil company Cepsa Trading SA as its owner weighs alternatives to an initial public offering (IPO) planned for later this year, according to people familiar with the matter.
Cepsa, owned by Abu Dhabi wealth fund Mubadala Investment Co, could be valued at around €10bil (US$11.7bil) in a sale or IPO, the people said, asking not to be identified because the discussions are private.
Investment firms including CVC Capital Partners and Blackstone Group LP as well as industry players may be interested in part or all of the company, they said.
No final decisions had been made as Mubadala continued to prepare for the listing, the people said. Discussions are at an early stage, they said.
A spokesman for Mubadala referred to a statement that Musabbeh Al Kaabi, the head of the firm’s petroleum and petrochemicals platform, made in a March interview with English-language UAE newspaper, the National. In it, Al Kaabi said they’re exploring options for Cepsa including a listing in Spain or bringing in a strategic partner.
The spokesman declined to comment on Vitol’s interest or any other details. Representatives for Vitol, CVC and Blackstone declined to comment.
With oil trading profits declining, the biggest players in the space are looking to replicate private equity firms by using their energy-industry expertise to buy and reshape businesses before selling them for a profit. Vitol’s Australian fuel and refining business Viva Energy Australia Ltd sold shares in an IPO last month.
Mubadala is seeking about €3bil from a stake sale, people familiar with the matter have said. That could make Cepsa’s IPO the largest in Europe this year after the €4.2bil listing of Siemens Healthineers AG, according to data compiled by Bloomberg. Still, some IPOs have struggled this year, which could make a sale to a bidder an attractive option.
European companies and their shareholders have raised about US$29bil from IPOs this year and withdrawn or postponed sales valued at almost US$7bil on market volatility and low investor demand, data compiled by Bloomberg show.
A potential divestment of Cepsa comes after Abu Dhabi in March combined two of its investment firms – Abu Dhabi Investment Council and Mubadala – to create a wealth fund with assets of about US$250bil.
The scale of the new entity clears the way for the oil-rich emirate to consolidate state-controlled companies and accelerate economic diversification in the United Arab Emirates.
Cepsa plans to boost sales to Asia, the only major region poised to see growth in its two main lines of business – refined oil products and chemicals used to make consumer goods.
The Madrid based-company, founded in 1929, was acquired by a unit of the UAE’s sovereign wealth fund in 2011 amid a push to invest in downstream industries to ensure future demand for their oil. — Bloomberg
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