Monthly M&A Insider - Mergermarket

Deal of the month
Target: Compania Espanola de Petroleos
SA (32.5% stake)
Announced: 31 March 2009
Bidder: International Petroleum Investment Company Deal value: €2,870m
Iberia
Seller: Santander Central Hispano Deal nature: Recommended, Cross border, Private
DESCRIPTION
• International Petroleum Investment Company (IPIC),
the United Arab Emirates based state owned company
responsible for all foreign investments in the oil and
chemicals sectors, has agreed to acquire a 32.5% stake
in Compania Espanola de Petroleos SA (CEPSA) the listed
Spain based company engaged in the exploration and
extraction of crude oil, from Santander Central Hispano SA
(SCH), the listed Spain based bank, for a total consideration
of €2.87bn.
TERMS
• IPIC will acquire 86,961,855 CEPSA shares at an offer price
of €33 per share
• The implied equity value of the transaction is €8,829.98m
• The offer price represents a premium of 4.76% over
CEPSA’s closing share price of €31.5 per share as of 30
March 2009, the last trading day prior to the announcement,
and represents a discount of 11.52% on CEPSA’s closing
price of €37.3 per share as of 27 February 2009, one month
prior to announcement.
FINANCING
• The acquisition will be financed through an €8bn syndicated
loan provided by Banco Santander, Banco Bilbao Vizcaya
Argentaria, Intesa San Paolo, Royal Bank of Scotland, La
Caixa, Calyon, BNP Paribas, Natixis, Caja Madrid, Bank of
Tokyo-Mitsubishi, Mediobanca, and Unicredit.
• Approximately €5.5bn of the total loan amount has a
maturity of five years due in 2014, and the remaining
€2.5bn has a maturity of seven years due in 2016.
RATIONALE
• The sale of the stake will help Santander Central to raise
cash to carry on its normal operations and IPIC will help
CEPSA in its business development.
POST DEAL DETAILS
• The parties expect that Union Fenosa SA, another CEPSA
shareholder, will also sell its 5% stake to IPIC on the same
terms.
• Provided both these acquisitions are completed, IPIC will
hold a 47% stake in CEPSA, becoming the second largest
shareholder of the company.
CONDITIONS
• The transaction is subject to regulatory approvals
• Approval from Commission Nacional del Mercado de
Valores regarding an exemption to launch a mandatory
offer for the remaining shares
• Financing arrangements
Monthly M&A report – 159