GIP said in talks to buy $4.5 billion stake in Spain’s Gas Natural

Global Infrastructure Partners is in preliminary discussions to acquire a stake in Spain’s Gas Natural SDG SA, according to people familiar with the matter.

Shareholders Repsol SA and Criteria Caixa SA are in talks with several investors to explore possibilities for their Gas Natural stakes, the companies said in regulatory filings Thursday, without identifying the bidders. The companies are in talks to sell about 10 percent of Gas Natural’s shares each.

The sale could value the 20 percent stake at about 4 billion euros ($4.5 billion), the people said, asking not to be named because the deliberations are private. No final decisions have been made and the talks could still fall apart, they said. KKR & Co. and one other potential suitor are also weighing bids, the people said.

Gas Natural shares rose 4.5 percent to 19.34 euros at 2:01 p.m. in Madrid after earlier climbing as much as 5.7 percent, the biggest intraday jump in almost a year. Repsol advanced 3.6 percent and CaixaBank SA gained 3.2 percent.

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Representatives for GIP, Criteria Caixa, Repsol and Gas Natural declined to comment. A spokesman for KKR didn’t have an immediate comment.

Low Prices

Criteria Caixa owns about 34 percent of Gas Natural while Repsol owns about 30 percent, according to the company’s website. Gas Natural, based in Barcelona, has a market valuation of about $21 billion.

A sale to GIP or another bidder is “great news” for Gas Natural because it means the company’s shares won’t be “dumped straight onto the market,” Bloomberg Intelligence analyst Elchin Mammadov said. At 4 billion euros, such a low premium probably reflects low gas prices and oversupply in the liquid natural gas market, he said.

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Madrid-based Repsol has joined peers in slashing spending and selling assets to adapt to the rout in crude prices, offloading its stake in a British wind farm, firing staff around the world and announcing a reduction in its dividend.

GIP, which manages about $33 billion for its investors, is an independent infrastructure fund that invests in energy, transport, waste and water assets around the globe. The firm’s portfolio includes investments in the clean-energy assets of Spain’s Actividades de Construccion y Servicios SA, according to its website. GIP and its partners also recently sold London City Airport.