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THE WALL STREET JOURNAL: Repsol Plans to Make Bid For Shell's LPG Business (ShellNews.net) Posted 27 May 05

 

By ANDRES CALA

Staff Reporter of THE WALL STREET JOURNAL

 

PARIS -- Repsol YPF plans to announce next week it is partnering with other investors to bid for Royal Dutch/Shell's liquefied petroleum gas distribution and marketing business, a move that if successful would make the Spanish oil and gas company the largest LPG distributor in the world, a person familiar with the negotiations said Thursday.

 

Repsol, the fifth-largest European energy company by market capitalization, plans to join forces with United Kingdom-based CVC Capital Partners and other undisclosed investors to coincide with a general meeting Tuesday at which Repsol's new chairman and chief executive, Antonio Brufau, will disclose the company's strategy for the next five years.

 

Mr. Brufau has already hinted that his strategy is to use Repsol's modest but reliable cash-generating operations in Latin America to finance diversification into other continents and an expansion of its refining and gas operations.

 

The person familiar with Repsol's plans didn't offer further details on the potential deal for Shell's LPG business. A spokesman for CVC declined to comment. Representatives at Shell couldn't be reached immediately for comment.

 

Shell's LPG unit is attracting interest from private-equity firms and oil companies. Analysts have said the asset is potentially valued at more than $3 billion, or 2.38 billion.

 

In September, the Anglo-Dutch oil company disclosed it had received an unsolicited approach from a potential buyer. The move sparked the company to provide an open ear to any proposal from possible bidders, though a final decision to sell or not has yet to be made. The asset sale, if completed, would be part of a $12 billion divestment program unveiled in September, as part of a larger overhaul of the business.

 

Write to Andres Cala at andres.cala@wsj.com 

 

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