Spanish oil giant targets Talisman
Spain’s biggest oil company is exploring a bid for Talisman Energy as it looks to deploy cash it received as compensation for the loss of its stake in Argentina’s YPF SA, say people familiar with the matter.
Repsol has identified Talisman as a top target and is working with JPMorgan Chase & Co. as it evaluates the deal, one of the people said.
Calgary-based Talisman, which has a market value of about $10.2 billion based on Tuesday’s closing price, is seeking to sell assets to cut debt and focus its capital on a smaller number of core assets.
A spokesman for Repsol declined to comment, as did representatives for Talisman and JPMorgan.
Repsol chief financial officer Miguel Martinez said in May that the company, which is valued at about $34 billion, is looking for targets that offer a “growth platform” and are based in more stable countries than most of its current overseas operations. Its biggest purchase so far, the more than $15 billion acquisition of Argentina’s YPF in 1999, ended with the Argentine government’s seizure of a 51 per cent stake in the company in 2012.
In May this year Repsol received and then sold about $5 billion of bonds from Argentina in compensation for the nationalization of the stake. It made a further $1.3 billion from the sale of the 12 per cent it still held in the Argentine gas and oil producer.
Repsol has said it may spend as much as $10 billion on deals, and any acquisition would probably be in the U.S., Canada or other developed markets, such as northern Europe.
Talisman in March said it plans to divest $2 billion in assets over 18 months and in June said it hired Miro Advisors Pty to sell its stake in oilfields off northern Australia. Talisman and Statoil ended their effort to sell a joint venture in Texas’s Eagle Ford shale after offers came in lower than expected, people familiar with the matter said this month.
Talisman has underperformed Canadian and global energy peers as it seeks to unwind a portfolio of investments spanning six continents amassed mostly last decade. The stock has fallen 36 per cent in the past five years.