Eton Park and Capital Guardian purchase 3.3% equity of Argentine YPF

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(Bloomberg) December 23, 2010 – Repsol YPF SA, Spain’s biggest oil company, agreed to sell a 3.3 percent stake in its Argentine unit YPF for $500 million as part of a plan to curb its investment in that Latin American country.

The Spanish company will sell stakes of 1.63 percent each to funds advised by Eton Park Capital Management and to funds advised by Capital Guardian Trust Co. and Capital International Inc. at $39 a share, Madrid-based Repsol said today in a regulatory filing. Eton Park also has an option to buy another 1.63 percent of YPF before January 2012 at $43 a share.

Repsol is seeking to reduce exposure to mature fields in Argentina while investing in exploration in Brazil’s offshore Santos Basin and elsewhere to increase output. In 2008, Repsol delayed a public offering of a stake in YPF, which produces and processes about 50 percent of Argentina’s oil and controls about as much of the domestic fuel market.

“These transactions help to increase the value of Repsol and bring us closer to achieving one of our key strategic goals,” Repsol Chief Executive Officer Antonio Brufau said today in the statement. Repsol holds 79.8 percent of YPF following the transactions announced today.

Brufau on April 29 had said the Spanish company wanted to sell part of its holding “sooner rather than later.” The shares may be sold to institutions or in the stock market and Repsol will keep at least 51 percent of YPF, he said.

‘Blue-Chip Investors’

“The presence of new blue-chip investors on the YPF share register increases our confidence that Repsol can dispose of a further 15 percent in 2011,” Daniel Ekstein, an analyst at Jefferies International Ltd. with a “buy” rating on the stock, said today in a research note. “Reducing exposure to YPF will improve group returns and allow increased focus on its high quality growth outside Argentina.”

Argentina’s Eskenazi family bought 15 percent of YPF from Repsol for $2.2 billion in December 2007 and has an option to buy another 10 percent by 2012. Repsol plans to raise as much as $2.36 billion through the sale of 15 percent stake, according to a Nov. 26 YPF filing.

Repsol fell 1.7 percent to 21.175 euros in Madrid. The shares have climbed 13 percent this year, valuing the company at 26 billion euros ($34 billion).

Oil and gas production at Repsol’s upstream division, which doesn’t include the YPF unit, rose 5.8 percent from a year earlier to 346,000 barrels of oil equivalent a day in the third quarter. Output from Buenos Aires-based YPF fell 2.7 percent to 551,000 barrels a day as mature fields declined.

By Joao Lima and Charles Penty