Private equity firm Carlyle Group is ahead of other contenders to buy a 30 percent stake in Spain’s Cepsa for up to 3 billion euros ($3.4 billion), just four months after owner Mubadala shelved a listing of the energy company, three sources familiar with the matter told Reuters.
Carlyle, whose energy and natural resources division includes funds such as Neptune Energy, could reach an agreement within weeks, one of the sources said.
Cepsa and Carlyle declined to comment.
Other investment firms including CVC, Apollo and Macquarie had expressed interest in buying a stake in the Spanish oil major, which is owned by Abu Dhabi wealth fund Mubadala Investment Company, sources previously told Reuters.
However, Carlyle has emerged as the favorite bidder in the process which is led by Rothschild, the sources said, although no deal has been finalised or agreed.
In October, Mubadala backed out of a plan to list 25 percent of Cepsa on the Madrid stock exchange citing uncertainty in international capital markets and lackluster appetite among international investors.
Cepsa reported a 15 percent fall in annual adjusted net (CCS) profit to 754 million euros last year.
Political uncertainty in Europe, U.S. political tensions and a global economic slowdown, topped off by the U.S.-China trade war and sanctions against Iran and Russia, deterred a series of initial public offerings (IPO) in the past few months.
Proceeds from global IPOs fell by 83 percent to $2.6 billion in January compared with the same month last year, Refinitiv data shows, while proceeds from European listings dropped 97 percent in the first two months of the year.
In the energy sector, Saudi Aramco was among the most high-profile listings that were halted in 2018.
At the smaller end of the scale, oil trader Vitol pulled its IPO of Varo Energy and sources said Kazakhstan has deferred the IPO of national oil firm KazMunayGaz to beyond 2019.
Conversely, a recovery in the oil price to its current level of around $65 a barrel, from $30 in 2016, coupled with attractive asset valuations, has driven a surge in M&A activity by private equity firms in the energy sector.
In 2013 Carlyle launched a $2.5 billion euro energy fund – Carlyle International Energy Partners (CIEP) – and has since then made a number of high profile acquisitions.
In 2017, it teamed up with CVC to buy the oil and gas assets of French utility Engie.
Carlyle’s Neptune Energy fund is currently bidding for the oil and gas assets being sold by EDF’s Italian unit Edison, according to sources.
By Andrés González, Clara Denina, Stanley Carvalho
France has launched an offshore green hydrogen production platform at the country’s Port of Saint-Nazaire this week, along with its first offshore wind farm. The hydrogen plant, which its operators say is the world’s first facility of its type, coincides with the launch of another “first of its kind” facility in Sweden dedicated to storing hydrogen in an underground lined rock cavern (LRC).
The project sets up the Hydrogen Valley in Rome, the first industrial-scale technological hub for the development of the national supply chain for the production, transport, storage and use of hydrogen for the decarbonization of industrial processes and for sustainable mobility.
At first glance, hydrogen seems to be the perfect solution to our energy needs. It doesn’t produce any carbon dioxide when used. It can store energy for long periods of time. It doesn’t leave behind hazardous waste materials, like nuclear does. And it doesn’t require large swathes of land to be flooded, like hydroelectricity. Seems too good to be true. So…what’s the catch?