Repsol Plans YPF Share Acquisition

Tuesday, July 28, 1998

Spanish oil company Repsol is planning to acquire a major part of the Argentine government's remaining 20% shareholding in oil company YPF (YPF: NYSE) in a sale scheduled for October.

According to energy sectorSources, Repsol intends to buy 16% of YPF for an anticipated US$1.85bn and has asked for advice on the deal from former public works minister Roberto Dromi.

But YPF statutes demand that any company planning to acquire more than 15% must make the offer for all of YPF's capital stock. According to Dromi, this rule is totally unnecessary and could seriously hinder the chances of any company making offers.

Some Argentine energy sector analysts say Repsol - backed up by either Venezuela's Pdvsa or Mexico's Pemex - could be trying to gain control of the entire company. As proof, the local analysts point to the amount of companies Repsol has acquired over a short time, such as Argentine oil company Astra and Gas Natural.

The Spanish company also controls gasoline station franchise Eg3, an interest in Pluspetrol and has approximately US$3bn left in its Latin America investment account until 2002.

Other analysts predict Repsol will only acquire 14.99% of YPF and would aim for operational control over the long term. The 14.99% shareholding would give Repsol two places on the YPF board.

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