Repsol Falls on Report Biggest Holder Seeks CEO Replacement

Repsol SA (REP), the Spanish oil producer that’s lost $12.6 billion of market value this year as its Argentine unit was nationalized, fell after a report that its biggest shareholder is trying to replace Antonio Brufau.

Repsol slid 0.7 percent to 15.58 euros in Madrid. The stock is down 34 percent this year.

CaixaBank (CABK), the Spanish lender that owned 12.5 percent of Madrid-based Repsol at the end of last year, is unhappy with how Brufau handled the YPF expropriation and has spoken with other shareholders about replacing him, Expansion reported, citing unidentified Repsol board members. Brufau has been chairman and chief executive officer of the company since 2004.

“Even though Caixa is a big shareholder, other investors will be aggressively against removing Brufau,” said Stuart Joyner, an analyst at Investec Securities Ltd. in London. “There’s not a natural successor. He’s had issues that are outside of his control, and where he’s had control he’s done well.”

Caixa has been talking to other shareholders about finding a new CEO for Repsol since June and would propose naming its CEO Juan Maria Nin as Brufau’s successor, Expansion said. Sacyr Vallehermoso, the second-biggest Repsol shareholder, said Nin doesn’t fit the profile for Repsol CEO, the paper said.

In April, Argentine President Cristina Fernandez de Kirchner nationalized YPF, her country’s largest oil company, saying Repsol failed to invest enough in the business. Analysts’ concerns focused on how Repsol will finance its expansion after the seizure. Brufau faced criticism for his handling of the YPF seizure at an annual meeting of Repsol shareholders in May.

Repsol, Spain’s biggest oil producer, lowered its dividend payout ratio to 40 percent to 55 percent of this year’s profits on May 29. It also plans to bolster production from its remaining assets outside of Argentina by 7 percent a year through 2016 and add new reserves covering 120 percent of the oil pumped.

Spokesmen for Repsol and CaixaBank declined to comment.

To contact the reporter on this story: Brian Swint in London at bswint@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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