Abu Dhabi set to cash in Cepsa Investment with US$11.6b IPO

[LONDON] Abu Dhabi is set to cash in significant gains as its Mubadala Investment Co pushes ahead with an initial public offering for Spanish oil firm Cepsa, in what could be the largest such deal in a decade.

The state-owned investor decided to proceed with an IPO rather than a sale after potential bidders for the company were narrowed down to private equity firm Carlyle Group LP, people familiar with the matter said. Cepsa could announce the IPO as early as next week, pending final approval from the emirate's rulers, the people said.

Cepsa could raise about 3 billion euros (S$4.79 billion) from selling a portion of its shares, people familiar with the plans said previously. That would make it the biggest oil IPO in about a decade, according to data compiled by Bloomberg, and value the whole company at as much as 10 billion euros.

If the Spanish refiner achieves the valuation its owners anticipate, Abu Dhabi would see significant paper gains because its funds took full control of the company in 2011 in a deal valuing it at about 7.5 billion euros.

Representatives for Mubadala and Cepsa declined to comment.

A unit of Mubadala acquired the nearly 90-year-old Cepsa amid a push to invest in downstream industries such as oil refining to ensure future demand for crude from the United Arab Emirates. The Madrid-based company is expected to list there.

BLOOMBERG