Abu Dhabi’s Cepsa IPO said to face muted investor appetite
Abu Dhabi’s plans to cash in significant gains with an initial public offering of Spanish oil firm Cepsa are facing headwinds as investors show a muted appetite, according to people familiar with the matter.
The emirate’s state-owned Mubadala Investment Co is still meeting clients, but books haven’t been covered because large investors who usually place orders at the beginning of the IPO process haven’t done so yet, the people said, asking not to be named because the information is private. Some funds were stung by the poor performance of recent big name IPOs, such as Aston Martin Lagonda Global Holdings Plc, in a volatile market. Mubadala plans to sell 25% of Cia Espanola de Petroleos SAU, or Cepsa, in what could be the largest oil IPO in a decade. The offering may value the Spanish refiner at between €7bn ($8.1bn) and €8.1bn, according to the pricing range published earlier this month. That was already short of initial expectations for a valuation of as much as €10bn, said people familiar with the discussions. Mubadala is unlikely to restructure the terms of the deal if it’s unable to get it done as currently proposed, said people familiar with the matter. A spokesman for Mubadala said the IPO process is still ongoing, without giving more details.
Cepsa declined to comment. Mubadala’s advisers are gauging interest in the IPO at a time when European equities are down to 2016 levels amid a global market rout. Oil companies in the region fell faster than the broader index on Thursday as crude made the largest two- day drop since July. Both markets recovered on yesterday as strong trade data from China buoyed sentiment.
Some investors are waiting to see how listing of Knorr-Bremse AG, a German manufacturer of truck and train brakes, performs this week after listing before putting in orders, people familiar with the matter said. LeasePlan Corp NV, Europe’s largest operator of vehicle fleets, abandoned its €7.5bn IPO on Thursday, citing deteriorating market confidence.
Abu Dhabi is seeking to raise as much as €2.02bn from Cepsa’s IPO, offering shares at a price range of €13.10 to €15.1 apiece. The final price was to be determined on October 16.