Portuguese oil company Galp Energia is planning a disposal of its gas distribution business that could fetch EUR 1.50 billion, Bloomberg reported, citing people with knowledge of the matter.
The sources, who asked to remain anonymous as the situation is still private, noted the company has hired Bank of America to advise on the possible sale.
Galp Energia is planning to send out preliminary packages with information on the business to potential buyers soon, the insiders said.
Initial bids are likely to take place in the coming weeks, the people observed, adding the process could attract infrastructure funds and other financial investors.
Sources cautioned there is no guarantee of a deal being agreed as the deliberations are still in the early stages and no final decision has been made.
Galp Energia owns stakes in nine natural gas distributors in Portugal, with a network spanning 13,015 km and a regulated asset base valued at EUR 1.10 billion at the end of 2018.
Headquartered in Lison, the natural gas supply, regasification, transport, storage and distribution business has 6,360 employees across 11 countries.
Shares in the company declined 2.3 per cent to EUR 9.28 at 12:40 today, giving the group a market capitalisation of EUR 7.69 billion.
In 2016, Galp Energia sold a 22.5 per cent stake in its gas distribution business to a consortium led by Marubeni.
According to Zephyr, the M&A database published by Bureau van Dijk, there have been 46 deals targeting Western European oil and gas extractors announced in 2020 to date.
In the largest of these so far, Premier Oil has agreed to acquire BP’s Andrew and Shearwater assets for USD 625.00 million.
Other targets have also included Spain’s Repsol, France-based Fosmax LNG and UK-headquartered Dana Petroleum (E&P)’s Tolmount Area gas field.
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