Morgan Stanley Unit Said to Mull Sale for Madrilena Red

Morgan Stanley (MS)’s infrastructure unit is considering selling Spanish gas distributor Madrilena Red de Gas Finance BV, according to three people familiar with the matter.

Morgan Stanley Infrastructure Partners, which owns MRDG, is speaking with advisers about a merger or initial public offering in Spain as early as this year, said the people, who asked not to be named as the details aren’t public. MRDG, which operates 11 percent of natural gas connection points in Spain according to its website, may be valued at more than 900 million euros ($1.2 billion) including debt, one person said. The talks are preliminary and no decision has been made, the people said.

Applus Services SA and Lar Espana Real Estate Socimi SA (LRE) are among Spanish companies that have helped raise more than $6 billion in IPOs this year, the most since 2011, according to data compiled by Bloomberg, as investors return to peripheral economies in Europe on the promise of a recovery in growth.

Spokesmen for the company and for Morgan Stanley declined to comment.

Madrilena Red sold 500 million euros of five-year bonds on the Luxembourg Stock Exchange in September 2013 and 275 million euros of 10-year bonds on the exchange in December, according to its annual report. It reported revenue of 176 million euros in 2013.

To contact the reporters on this story: Ruth David in London at rdavid9@bloomberg.net; Manuel Baigorri in London at mbaigorri@bloomberg.net

To contact the editors responsible for this story: Jacqueline Simmons at jackiem@bloomberg.net Elizabeth Fournier, Elizabeth Wollman

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