Mubadala scraps oil refiner Cepsa’s IPO

Mubadala shelved plans for an initial public offering of a 25 per cent stake in Spanish oil refiner Cepsa as investors balked at the valuation amid a stock market rout.

“Recent international economic developments have created uncertainty in international capital markets,” said Cepsa, controlled by Mubadala Investment Co. The final price for the IPO was set to be decided yesterday.

Bankers scrambled last week to save the IPO, expected to be the largest by an oil company in more than a decade, as investors balked at Mubadala’s valuation. The sale coincided with a rout in the global equity market, with European stocks down to the lowest since 2016 levels.

The offering would have valued Spain-based Cepsa at between €7 billion (Dh30.13 billion) and €8.1 billion. Mubadala’s preference was to pull the IPO rather than accept a lower valuation, sources said last week.

Cepsa’s is not the first IPO cancelled this month. Vehicle manager LeasePlan scrapped a €7.5 billion offer and Portugal’s Sonae SGPS also called off the listing of its retail unit. HNA Group Co. in April postponed a planned share sale in its aircraft ground-handling company Swissport Group, after abandoning a similar plan for its Swiss airline caterer Gategroup Holding AG. Investors are also wary given Aston Martin’s flop following its October 3 IPO.

Large investors, who tend to place orders at the beginning of an IPO process, shied away from Cepsa’s offering, people familiar with the matter said late last week. Some funds had been stung by recent big name IPOs, such as Aston Martin’s. The €7 billion-€8.1 billion price target sought by Mubadala was already short of the fund’s €10 billion target, sources said.

Mubadala said it would consider reviving the IPO.

“As a long-term investor, we will consider returning to the market when we believe conditions are favourable,” Mubadala Chief Executive Officer Mosabah Al Kaabi said in a statement.