Repsol chairman gears himself for assault on his leadership

Repsol Chairman and CEO Antonio Brufau is mounting a defense against a challenge to his authority launched earlier this week by two of the leading Spanish oil company's shareholders, local builder Sacyr Vallehermoso and Petróleos Mexicanos.

Sacyr and Pemex have agreed to vote together at board meetings on strategic decisions for Repsol and also indicated they want the posts of chairman and chief executive officer to be split. Sacyr is Repsol's biggest shareholder with a 20-percent stake, while Pemex plans to increase its holding to 9.8 percent from 4.8 percent. Their potential combined stake of 29.8 percent would remain just below the 30 percent that would trigger a mandatory takeover bid.

Repsol's legal team are working on the idea that Sacyr and Pemex are moving to seize management control of the company without launching a takeover bid, something that could be considered fraudulent under the takeover laws.

The association of minority shareholders in listed companies (AEMEC) used the same argument to insist that Pemex and Sacyr-nominated directors should abandon Repsol's management board.

However, the National Energy Commission (CNE), the sector watchdog, on Wednesday said it saw no need to probe an operation that did not involve seizing control of the company.

Repsol's legal team also argues that there now exists a conflict of interest with Pemex, which is a direct competitor of the Spanish oil company.