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Repsol, CVC to Jointly Bid For Shell’s LPG Assets

THE WALL STREET JOURNAL: Repsol, CVC to Jointly Bid For Shell’s LPG Assets

Posted 3 June 2005



Repsol YPF SA signed an agreement with British private equity firm CVC Capital Partners Ltd. to bid around €2.5 billion ($3.05 billion) for Royal Dutch/Shell Group’s liquefied-petroleum-gas distribution and marketing business, a Repsol official said Thursday.

If the bid is accepted, Spanish company Repsol, the fifth-largest European oil company by market capitalization, would also become the world’s largest LPG distributor.

People familiar with the sale process have told Dow Jones Newswires that several parties are interested in the asset. They include utility companies UGI Corp. of the U.S., Ultrapar Participacoes SA of Brazil, Dutch SHV Holdings NV and Total SA of France. Shell hasn’t officially confirmed the names of any interested parties.

Under the CVC-Repsol agreement, signed earlier this week, Repsol would get 60% of the LPG unit, while CVC would hold the remaining 40% if the consortium wins the asset.

CVC would ante up between 70% and 80% of the money and Repsol would be responsible for operating the business through its Repsol Butano SA unit, Repsol’s spokeswoman said.

A person familiar with the negotiations said Repsol’s recent acquisition of Shell’s Portuguese LPG unit could put the Spanish company in a strong position to win the bid when a final decision is made by September.

A spokeswoman for Shell said in May that the formal sale process will start in July with the opening of Shell LPG’s data room. People involved in the sale say the unit is valued between $2.4 billion and $3.2 billion by people involved in the process.

Shell says it wants to finalize the sale by the end of the year. It is part of a disposal program that aims to raise up to $15 billion over the next three years to improve its upstream oil and gas exploration business.

LPG is a mixture of butane and propane that is commonly used for cooking, heating and transportation purposes. It is derived from crude oil and usually transported in cylinders for domestic use.

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