* Sells 7.86 percent stake at 20.10 euros per share
* HSBC declares 5.37 percent stake in Repsol
* Shareholder Sacyr may sell up to 4 percent - analysts
* Repsol shares close 3.6 pct lower
(Updates with Pemex statement, updates share price, market
comparisons, adds graphic)
By Tracy Rucinski and Ana Isabel Martinez
MADRID/MEXICO CITY, June 4 Mexico's state oil
giant Pemex said it has sold most of its stake in Spain's Repsol
SA for 2.09 billion euros ($2.9 billion) on Wednesday, and plans
to unload the rest soon, ending a quarter-century partnership
and freeing up cash to invest in its own energy sector.
Pemex sold 7.86 percent of Repsol to unspecified
private investors at 20.10 euros each, a 3.7 percent discount to
the Spanish company's closing price on Tuesday. The Mexican
company later said it aimed to sell its remaining 1.4 percent
stake in Repsol in August.
Pemex's exit as one of Repsol's top three
shareholders ends a relationship that had become increasingly
fractious in recent years due to disagreements on policies
ranging from top management to the handling of Repsol
investments in Argentina.
Pemex had publicly criticized Repsol Chairman Antonio
Brufau's compensation and management, in particular his handling
of the Argentine government's move to nationalize Repsol's YPF
unit. The Mexican company sought to oust Brufau in 2011.
Tensions reached breaking point last month when Brufau
appointed a chief executive officer whom Pemex had not endorsed.
"The decision to end the Repsol investment is due to the low
profitability of the shares obtained by the current
administration compared with other oil firms and our differences
on its corporate governance," Pemex said in a statement.
Pemex said it had made a more than $900 million gain on its
Repsol said in a statement that Pemex had resigned from its
The sale comes five days before Mexican President Enrique
Pena Nieto makes his first official visit to Spain and as the
Latin American country is putting an end to the oil and gas
production monopoly Pemex has had since 1938.
Two sources close to the matter said that the books were not
covered, leaving bookrunners Citigroup Inc and Deutsche
Bank AG holding an unspecified number of shares.
Separately, HSBC Holdings PLC declared a 5.37
percent stake in Repsol worth 1.4 billion euros on Tuesday,
becoming the oil firm's fourth-largest shareholder behind lender
CaixaBank SA, builder Sacyr SA and
Singapore's Temasek Holdings Ltd.
Shares in Repsol closed 3.62 percent lower on Wednesday at
20.11 euros, ending around the price of the placement.
Shares in Repsol have risen less than 30 percent since the
end of October 2004, when Brufau took over, compared with a more
than 130 percent increase in the NYSE Arca Oil Index of
leading oil companies.
Pemex Chief Financial Officer Mario Beauregard said the
company would look to sell its remaining shares in due course.
"Once this financing is complete, we'll look for the best market
conditions to get rid of the remaining position," he said.
The plan was to sell the shares in August, Beauregard said,
confirming what company sources had earlier told Reuters.
Pemex said it would remain open to making investments in
other companies if opportunities arose.
Repsol analysts welcomed the departure of Pemex, saying it
should help ease boardroom tensions at Repsol and allow Brufau
to focus on acquisition plans.
"We believe that this gives Repsol management a free rein to
decide on the next strategic steps for the company," Exane BNP
Paribas analyst Alejandro Demichelis said.
Repsol has raised $6.3 billion from its exit from Argentina
after that country seized the oil major's YPF unit in 2012. It
could spend part of the funds boosting growth at its upstream
business, with a search for cash-generating oil assets.
It will also pay a 1 euro-per-share special dividend with
part of the Argentine proceeds on June 6.
After being left with a significant Repsol holding, Citi and
Deutsche Bank said in a regulatory filing a "guarantee" on the
deal had come into effect, without giving details on what type.
Deutsche Bank and Citigroup declined to comment.
The banks' position in Repsol may be as much as 6 percent,
one banking source said.
Analysts said they do not rule out its second-largest
shareholder, Sacyr, selling up to 4 percent of its Repsol stake
in coming months as it tries to refinance a 2.4 billion-euro
loan linked to its Repsol purchase before the start of 2015.
($1 = 0.7342 euros)
(Additional reporting by Freya Berry in London, David Alire
Garcia and Michael O'Boyle in Mexico City and Carlos Ruano in
Madrid; Editing by David Holmes, Mark Heinrich, Jane Baird,
Marguerita Choy, Simon Gardner and Jonathan Oatis)