Eni Sells $1.9 Billion Stake in Italian Gas Network SnamRuth David, Sarah Jones and Francesca Cinelli
Eni SpA, Italy’s largest oil company, sold a $1.9 billion stake in Snam SpA, the owner of the country’s biggest natural-gas network.
About 395 million shares, or 11.7 percent of the company, were sold at a price of 3.69 euros a share, according to a statement. The shares were initially offered in a price range of 3.69 euros to 3.77 euros each, according to terms obtained by Bloomberg News.
Eni, which sold a 30 percent stake in Snam to state-owned bank Cassa Depositi e Prestiti SA for 3.5 million euros last year, said it will use the proceeds for general purposes. Then-Prime Minister Mario Monti pushed for Eni to give up control of gas distributor Snam last year to improve the competitiveness of Italy’s energy industry.
Snam shares slumped 5.1 percent to 3.65 euros today in Milan. The stock is up about 4 percent this year.
Eni’s placing is positive for Snam, which is part of a group buying a French pipeline network, because it removes uncertainty, Societe Generale SA said in a note.
The volume of secondary shares sales in Europe, including accelerated book builds, has risen about 87 percent from the same period last year, data compiled by Bloomberg show. Stakeholders including the French government and Warburg Pincus LLC are paring holdings in the region.
JPMorgan Chase & Co. and UniCredit SpA managed the sale, according to a statement. After the placement, Eni will hold an 8.54 percent stake in Snam, underlying a 1.25 billion-euro convertible bond placed on January 18 and due in 2016.
Lazard Ltd. worked with Eni on the sale of its stake, a spokesman for the advisory firm confirmed.
Issuers in Europe, the Middle East and Africa raised $36.7 billion in secondary share sales this year, according to data compiled by Bloomberg.