MILAN Feb 4 Italy's market watchdog Consob has
asked its British counterpart to probe a sale of Saipem
shares by BofA Merrill Lynch a day before the oil
services group issued a profit warning that sank the shares, a
source close to Consob said on Monday.
"Consob has asked the FSA (Financial Services Authority) to
look into the placement by Merrill Lynch to better understand
what exactly went on," the source said.
Last Tuesday, traders said Bank of America-Merrill Lynch
had placed 2.3 percent of Saipem shares on the market
for 30.65 euros per share.
After the market closed on the same day, shares in Saipem
plunged 34 percent to 19.97 euros after the company's new
management took an axe to forecasts and painted a grim outlook
Bofa Merrill Lynch declined to comment.
In an interview with an Italian newspaper on Sunday, Saipem
Chief Executive Umberto Vergine said he had not been pre-alerted
as to any placement and had learned of it from news agencies.
"Consob has asked the FSA to look into the timing of the
placement and who sold shares to whom," the source said.
Consob and Saipem also declined to comment. The Financial
Services Authority could not immediately be reached after hours.
Vergine, a former manager at oil major Eni, took
over as CEO of Europe's biggest oil service group in December
after his predecessor Pietro Franco Tali resigned in the wake of
a probe into alleged corruption in Algeria.
Eni, the biggest foreign oil and gas operator in Africa,
owns around 43 percent of Saipem.
"The new CEO obviously took the opportunity to clean up the
balance sheet but I wasn't expecting such a severe cut and the
question now must be if there's any more," a Milan-based oil
analyst said on Monday.
Vergine and Chief Financial Officer Stefano Goberti met with
Consob on Monday for more than two hours. The two managers left
"Consob wants to know about the timing of the profit
warning, the severity and what was behind it," the Consob source
The profit warning, coming so soon after the Algerian probe,
has exacerbated concerns some investors could be scared off. In
December, investment fund Capital Research and Management cut
its stake to 1.3 percent from nearly 5 percent.
Saipem said last Tuesday that while profits in 2013 would
fall around 80 percent, it expected a significant rebound in