Repsol: one piece at a time

Normally, big names flying off the shareholder register are a danger sign. For Repsol, the Spanish oil major long tied in political and corporate knots, it is sweet relief.

Some of Repsol's owners have been rather odd all along. They look odder given that Repsol is finally emerging from the expropriation, two years ago, of most of its stake in YPF - a prize asset before the Argentine government took it.

Consider who is most likely in the near future to sell Repsol shares (which are near 52-week highs). Pemex, a top-four holder, is inching ever less subtly towards a sale of its 9 per cent stake. Mexico's state oil company will not be missed from the shareholder rolls. It was a barrier to progress in the Argentine dispute.

Next, Sacyr, the Spanish construction company. It may soon sell 3 per cent or 4 per cent of Repsol. Sacyr has a tenth overall, the remnant of a fifth acquired at the top of the market in 2006 - a foolish attempt at diversification. The stake ended being used as collateral as Sacyr restructured its business away from housebuilding in Spain. Any sale at Repsol's current price would be above the shares' value in Sacyr's accounts.

A sale is increasingly likely because Sacyr's shareholder list is itself vastly different to a few years ago: a quasi-private company with a 20 per cent free float is now two-thirds owned by foreign investors. Such owners might be focused on the short term but their motives are, at least, transparent.

Repsol itself is taking a short term approach to its Argentine assets. The 12 per cent YPF stake that was not expropriated has just been sold to Morgan Stanley. JPMorgan snapped up $2.8bn in Argentine bonds received in return for YPF within days of Repsol acquiring them. Repsol could use the cash to invest in upstream assets in safer spots than Argentina. Keep it simple from here, please.

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