Abu Dhabi's IPIC launches full takeover bid for Cepsa

Abu Dhabi's state-owned oil holding company International Petroleum Investment (IPIC) on Wednesday launched a full takeover bid for Cepsa after reaching an agreement to buy the stake held in the Spanish firm by France's Total.

IPIC is offering 28 euros per share for Cepsa valuing Spain's second-biggest oil company at around 7.5 billion euros. Total has agreed to tender its 48.8-percent stake in Cepsa for which it will receive about 3.7 billion euros. IPIC already holds 47.1 percent of Cepsa.

The offer is at a 23-percent premium to Cepsa's closing share price on Tuesday. Existing Cepsa shareholders will also receive a dividend of 0.50 euros per share.

After acquiring Total's stake, IPIC will hold 95.9 percent which will allow it to forcibly buy out minority shareholders that decline its offer.

The deal is subject to approval by the relevant authorities

Total said the deal allows it to reduce its exposure to the European refining business. The French oil company also said it had signed a memorandum of understanding with IPIC in exploration and production. The two companies plan to develop projects of common interest in the upstream oil and gas sectors.

Created in 1929, Cepsa was the first private oil company in Spain. It has a refining capacity of 528,000 barrels per day and a network of about 1,750 service stations in Spain and Portugal. Its hydrocarbons output is approximately 55,000 barrels per day. CEPSA also operates in the petrochemicals, gas distribution and power sectors.

Cepsa also has a 20-percent stake in the Medgaz gas pipeline project linking Algeria and Spain and has a presence in Brazil, Canada, Colombia, Egypt, Panama and Peru.

IPIC has been a core shareholder of Cepsa since 1988. It bought Banco Santander and Unión Fenosa's combined stake of 32.5 percent in 2009, paying 33 euros per share.