Op-ed: Doubts around Repsol

Sacyr and Pemex have announced that they will join forces and vote together on key issues. The Mexican-owned Pemex offered to increase its interest in Repsol by 5%, so that it and Sacyr will control 29.8% of the company. Both assure that they will keep the "Spanishness" of Brufau's company intact. They believe that the stock price does not reflect the true value of the gas company, and they will take necessary measures to change that. That claim was interpreted to mean higher dividends, which would boost Repsol's stock price by 4% and Sacyr's by 12%.

It seems clear that Brufau and Del Rivero's altercations about retribution politics, suitable investment levels and dividends will continue. Heavily indebted, the construction company Sacyr needs returns with which they can meet current financial obligations. Tied closely to Mexico, Pemex is searching for ways to expand. This implies a long battle for control, and events could go in several directions.

Although Sacyr and Pemex will be careful not to obtain a 30% stake (this level would force them into a hostile takeover situation), the CNMV could declare that under these circumstances they would have to engage in one, particularly if they are capable of doing it with the control affected by the recent elimination of protection on the advisory board. Another point of contention is rooted in the fact that Pemex, one of Repsol's competitors and technically owned by the Mexican government, could decide strategic questions on behalf of the Spanish company. Questions of national politics and energy politics abound. Many of the debates will probably end up in the courts.