Corporate finance: Brufau steers Repsol away from risk
In August, Sacyr Vallehermoso, faced with huge debt, decided to analyse the selling price of its assets. Sacyr then put motorway company Itinere, real estate company Testa, and its stake in Repsol up for sale. My understanding is that it will sell the motorway business and retain the stake in Repsol: it considers the energy sector more strategic than the motorway sector. [Following this interview, Sacyr subsequently sold Itinere to Citigroup for €7.9 billion at the beginning of December but is reported to still be considering the sale of its stake in Repsol].
Were the [Repsol] stake to be sold, the crucial question for Repsol is to whom. I don’t have a problem with a financial buyer. The sale would be more problematic if it is to one of Repsol’s competitors. There are issues that must be addressed. First, Repsol must remain independent. Second, any sale must facilitate Repsol’s continued growth. And third, Repsol’s competitiveness must be ensured. Of course, my hope is that Repsol’s shareholding structure doesn’t change and that the company can continue to follow its current business plan.
It would depend on the overlap. For example, French or British companies often compete in the same market as Repsol [both France’s Total and the UK’s Royal Dutch Shell were reported to be considering buying Sacyr’s stake at the end of September] and therefore there would be little advantage to Repsol if they acquired the stake. A Russian company [Lukoil is considered the most likely candidate to buy the stake] might make more sense, as they are rarely direct competitors to Repsol. Moreover, we might be able to share expertise in emerging markets. An alliance or joint venture with a Russian company might make entry to countries such as Kazakhstan, Uzbekistan and elsewhere in the former Soviet Union easier for Repsol. And equally, Repsol could make it easier for a Russian company to gain entry to Latin American markets.
The most important concept in relation to creating value for shareholders is equal treatment. If someone buys the 20% stake for a premium – because they are seeking control – my responsibility is to ensure that all shareholders of Repsol receive the same premium. In Spain, it is a requirement to launch a takeover once a stake exceeds 30%. If a buyer pays a premium for 29.9% but does not pay the same premium to gain control then it is not fair to all shareholders – and therefore I oppose it. I have nothing against a takeover – that’s the normal life of a business. What I am opposed to is control being gained for as little as possible and discriminating against some shareholders.
