Abu Dhabi’s Cepsa IPO said to face muted in­vestor ap­petite

Gulf Times Business - - FRONT PAGE -

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.

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