May 30, 2012 / 6:33 PM / 5 years ago

Eni to sell 30 percent of Snam to CDP for 3.5 billion euros

MILAN (Reuters) - Italy’s oil and gas major Eni (ENI.MI) will sell 30 percent minus one share in Snam (SRG.MI) to state-controlled holding company Cassa Depositi e Prestiti (CDP) for 3.517 billion euros ($4.36 billion), as part of the government-designed plan for Eni to exit from the gas network.

Under a decree approved last week, Eni has up to 18 months to sell down its 52.5 percent stake in Snam as Rome wants to spur competition on Italy’s gas market and take a lead in building a European gas transport champion.

The sale is agreed at above the market prices as Eni and CDP have set a price for Snam at 3.47 euros per share, with a nearly 11 percent premium to Snam’s 3.136 euros closing price on Wednesday and a 3 percent premium to Snam’s average share price in the last 30 days.

Eni, which aims to close the sale to CDP by the end of 2012, plans to sell out of the gas company completely, with timing depending on market conditions, because it is not interested in holding on to a minority stake, Eni’s chief executive said.

“We will exit from Snam completely ... We are not in the business of financial stakes,” Eni CEO Paolo Scaroni told a news conference.

Scaroni said institutional investors have already shown interest in buying Snam shares from Eni. However, Eni does not rule out a sale of part of its stake in Snam to retail investors in Italy, Eni’s Chief Financial Officer Alessandro Bernini said.

CDP, which owns about 26.4 percent of Eni, said it will sell about 3 percent in the oil and gas group to raise about 2 billion euros to help finance the Snam stake purchase.

Eni, which has decided to cancel its treasury stock and launch a new buyback program for about 10 percent of its share capital, will not buy shares from CDP, Scaroni said.

Scaroni said he was not worried that foreign sovereign wealth funds could end up being shareholders in Eni: “Any shareholder is welcome.”

Eni expects Snam to start repaying its 11.2 billion euro debt to Eni from the start of October once it is deconsolidated from the group, Bernini said.

Reporting by Svetlana Kovalyova; Editing by Gary Hill

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below