Doris Leblond
OGJ correspondent
PARIS, Sept. 29 -- Spain's Santander Central Hispano SA (SCH) Friday made an offer to acquire 16% of additional equity in Cía. Española de Petróleos SA (CEPSA), Cepsa, Spain's second largest oil company, in a bid that would give the banking group a 35.9% holding in the company.
Total SA, which is a majority stakeholder in CEPSA with 45.28%, reacted strongly to SCH's public offering. SCH and Total had an agreement, signed in 1990, requiring mutual consent for any changes in the stake of either partner.
SCH claims that this agreement no longer applies following the approval last July by Spain's Parliament of the Aldana Law, which forbids pacts signed since 1988 between shareholders that collectively hold more than 25% of a company's capital. Total asserted in a Sept. 26 statement that SCH has "hastily interpreted the Spanish law" and now is threatening to take the banking group to court.
Reasons behind bid
While Total would not comment on what it thought might be the reasons behind SCH's purchase bid, analysts speculated about several.
Some analysts believe the whole matter could possibly relate to voting rights within CEPSA itself. In 1990 the Spanish government accepted Total's CEPSA stakeholding but limited the company's voting rights; even with its majority holding, Total only has 36.9% voting rights, while SCH controls 33.2% of the votes with its current 19.9% CEPSA shareholding. CEPSA might have feared that the end of the mutual pact under the new law would give Total majority voting rights.
Pointing out that SCH's interest in CEPSA is purely financial and not strategic, analysts also note that the public offering does not exceed 16%, meaning that SCH wishes to remain beneath the 50% stakeholder point, which would force it to launch a full takeover bid on CEPSA. This sparks off the assumption that SCH might be aiming to force Total to make a counterbid on the whole of CEPSA so that SCH could pull out of the Spanish oil group with a substantial benefit.
SCH's purchase bid has made CEPSA's share price soar. Total Chairman and CEO Thierry Desmarest had indicated earlier this month that he was not contemplating, for the time being, increasing Total's stake in CEPSA. A full takeover bid on the company would cost Total about 3.8 billion euros.
CEPSA's third largest shareholder is Abu Dhabi's IPI, which has a 9.5% stake, while the balance of the shares are publicly held.