Eni Won’t Spin Off Saipem Regardless of Knight Vinke Request
Correspondence between Knight and Eni on the issue was part of normal relations with shareholders, Recchi told reporters at a conference today in Cernobbio, Italy. “We pay attention to what our shareholders say,” he said.
Knight, founder of the Knight Vinke fund, which owns less than 1 percent of Italy’s biggest oil company, wrote a letter to Eni Chief Executive Officer Paolo Scaroni last week saying a spinoff of Saipem would be beneficial. The contents of the letter were reported by Italian newspaper Il Sole 24 Ore.
Knight argued that Eni should free itself from Saipem, whose shares have fallen more than 30 percent since the end of January when reports emerged that the company may be the subject of an enquiry. Scaroni and several managers were put under investigation Feb. 7 as part of a probe into the award of oil- services contracts to Saipem in Algeria. The company has denied any wrongdoing.
Saipem also lost market value after saying on Jan. 30 that 2013 earnings before interest and tax would be less than half the amount expected due to delays in contract awards and contracts entered into at lower margins.
Shares recovered today, gaining as much as 3.2 percent to 21.6 euros, the highest price since Feb. 7. That boosted Saipem’s market value to 9.5 billion euros. Analysts at Goldman Sachs raised the shares to “conviction list buy” from “neutral” on March 5, citing likely margin recovery beyond 2013 and overly conservative management guidance.
Separately, Recchi declined to comment on whether the company was in talks with China National Petroleum Corp. for a stake in a gas project in Mozambique.
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