🎁 💸 Warren Buffett's Top Picks Are Up +49.1%. Copy Them to Your Watchlist – For FreeCopy Portfolio

UPDATE 1-Eni shareholder says structure can be improved

Published 09/02/2009, 11:28 AM
Updated 09/02/2009, 11:33 AM
SRG
-
ENI
-

* Knight Vinke asset mgr favours splitting ops

* Upstream, downstream ops each worth more than the whole

(Releads, adds detail, share price, trader comment)

MILAN, Sept 2 (Reuters) - The structure of Italian oil and gas group Eni could be improved and value generated by splitting its upstream and downstream businesses, an Eni shareholder said on Wednesday.

Knight Vinke, the New York-based asset manager which owns just under 1 percent of Italian oil and gas group Eni, said in a press release that, unlike other national energy companies, Eni has major upstream and downstream business, "each of which would be as valuable as the whole of Eni is today".

"Combining the two businesses under one roof results in Eni being financially constrained, as clearly demonstrated by the recent dividend cut," it said in a statement.

In its current shape the Group is unable to borrow as much as Eni's downstream utility could borrow on its own and its shares trade on a low multiple that does not reflect the high growth of its upstream operations, Knight Vinke said.

Earlier this year, activist shareholder Knight Vinke criticised the strategy of HSBC bank, winning some support from other HSBC shareholders

Eni, which is controlled by the Italian state, controls Italian gas transmission grid operator Snam Rete Gas which in turn controls domestic gas distribution network Italgas and gas storage unit Stogit.

Eni was not immediately available for comment.

"They (Knight Vinke) are saying reasonable things but (Paolo) Scaroni (Eni chief executive) has said he would never sell the group's utilities. It is unlikely anything will happen but at least they made the point," a Milan-based analyst said.

At 1447 GMT Eni shares were up 1.72 percent at 16.55 euros.

(Reporting by Stephen Jewkes; editing by Elaine Hardcastle)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.