Argentina YPF shares end up on state takeover talk

BUENOS AIRES Thu Apr 12, 2012 5:36pm EDT

BUENOS AIRES (Reuters) - The shares of Argentina's biggest energy company, YPF SA (YPFD.BA), closed 7.4 percent higher on Thursday ahead of an expected government takeover of the company.

YPF's stock has shed about 27 percent since the start of the year, hurt by media reports saying the government will either expropriate or buy a controlling stake in the company, which is majority owned by Spain's Repsol (REP.MC).

Some local media say President Cristina Fernandez will make an announcement on Thursday evening regarding YPF's future, but government officials did not confirm this.

The company has come under fierce state pressure to increase oil and gas production as costly fuel imports eat into Argentina's trade surplus. Fernandez nationalized private pension funds and the nation's flagship airline in 2008.

YPF's shares ended up at 123.00 pesos. Traders said a possible government intervention has already been priced in and investors are now trying to find a way to profit.

"The issue is what price will be paid for the company," said Guillermo Curutchet, an analyst at brokerage Sudamericana de Finanzas. "It's speculation at this point, but when the final announcement is made, investors should buy (the shares) because they will rise initially."

Spain's industry minister, Jose Manuel Soria, alluded to Repsol's predicament in Argentina on Thursday.

"If somewhere in the world there are gestures of hostility toward Spanish companies' interests, the government interprets them as hostility toward Spain," Soria said, without referring specifically to YPF. "And if there are gestures of hostility, they will have consequences."

The Clarin newspaper initially reported that the government sent a bill to Congress to expropriate more than 50 percent of YPF's shares. But it later changed that to say the government "may have decided" to send the proposal.

No official bill from the executive branch has been sent to Congress and a high-level source told reporters that at least five different drafts relating to YPF were being studied.

Several of Argentina's provincial governments have stripped YPF of some key production licenses recently, citing insufficient investment. YPF was privatized in 1992 after 70 years as a state company.

Repsol, which holds a 57 percent stake in the company, has been gradually reducing its holdings as it frees capital to invest in other emerging markets such as Brazil. Argentina's Eskenazi family holds 25.5 percent.

"Traders are expecting a government announcement and speculate that it will be a mixed (public-private) company," said Jorge Alberti, an analyst at online brokerage ElAccionista.

Pro-nationalization posters were plastered on walls in Buenos Aires. One of them read: "YPF - neither private nor foreign. 100 percent public; 100 percent Argentine."

(Reporting by Walter Bianchi and Alejandro Lifschitz; Additional reporting by Andres Gonzalez in Madrid; Writing by Luis Andres Henao and Hilary Burke; editing by Andre Grenon)

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