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‘Carlyle in final talks to clinch $3.4 billion deal for Cepsa stake’

‘Carlyle in final talks to clinch $3.4 billion deal for Cepsa stake’

Private equity firm Carlyle Group is ahead of other contenders to buy a 30 percent stake in Spain’s Cepsa for up to 3 billion euros ($3.4 billion), just four months after owner Mubadala shelved a listing of the energy company, three sources familiar with the matter.

Carlyle, whose energy and natural resources division includes funds such as Neptune Energy, could reach an agreement within weeks, one of the sources said.

Cepsa and Carlyle declined to comment.

Other investment firms including CVC, Apollo and Macquarie had expressed interest in buying a stake in the Spanish oil major, which is owned by Abu Dhabi wealth fund Mubadala Investment Company, sources previously.

However, Carlyle has emerged as the favorite bidder in the process which is led by Rothschild, the sources said, although no deal has been finalised or agreed.

In October, Mubadala backed out of a plan to list 25 percent of Cepsa on the Madrid stock exchange citing uncertainty in international capital markets and lackluster appetite among international investors.

Cepsa reported a 15 percent fall in annual adjusted net (CCS) profit to 754 million euros last year.

Political uncertainty in Europe, U.S. political tensions and a global economic slowdown, topped off by the U.S.-China trade war and sanctions against Iran and Russia, deterred a series of initial public offerings (IPO) in the past few months.

Proceeds from global IPOs fell by 83 percent to $2.6 billion in January compared with the same month last year, Refinitiv data shows, while proceeds from European listings dropped 97 percent in the first two months of the year.

In the energy sector, Saudi Aramco was among the most high-profile listings that were halted in 2018.

At the smaller end of the scale, oil trader Vitol pulled its IPO of Varo Energy and sources said Kazakhstan has deferred the IPO of national oil firm KazMunayGaz to beyond 2019.