Investment bank puts $11bn tag on Plenitude as oil player Eni mulls new IPO for renewables unit
Sale of 20-30% could raise up to $3bn for Italy's oil and gas giant, it is suggested
Plenitude, a renewables and electricity offshoot of Italian oil major Eni that has been earmarked for a partial stock market flotation, has a value of around €10bn ($11bn), investment bank Jefferies said today (Tuesday).
In a research note that was commenting on Eni’s reported readiness to sell a stake in Plenitude in a one-off transaction, Jefferies suggested a “sum-of-the-parts” equity valuation of €8-€12bn.
The group has been in talks with several investors, including Switzerland's Energy Infrastructure Partners (EIP), over a potential sale of a 5-15% minority stake in the unit, according to news agency reports.
Eni, while declining to comment on specifics, has said in the past that it is open to a private sale, Jefferies noted.
The bank predicted that selling a private stake in this way would probably be a precursor to a relaunch of a delayed initial public offering.
"A (private) sale would cause a delay in the IPO timeline, but it would provide investors with a valuation reference for a business model that currently does not have any fully comparable listed peers," Jefferies said in its report.
“If confirmed by a transaction, it will represent a positive catalyst for Eni and set an important valuation reference ahead of a future IPO,” the research note stated.
Volatility call
Eni was planning to stage the IPO for Plenitude in the second half of last year after rapidly increasing its installed renewables capacity with investments such as the Corazon and Brazoria solar photovoltaic projects in the US and the Fortore Energia wind farm in Italy.
However, the IPO was postponed in July 2022, however, due to what was described as volatile market conditions.
Eni chief executive Claudio Descalzi said then that the IPO would still be staged when the time was right, and he has since suggested that it could occur later this year or in 2024.
To develop subsidiaries, the Italian group says it is applying a 'satellite' approach that aims to create specialised units able to attract investors focused on those businesses.
The Plenitude spin off a could be followed by a similar strategy for the group's Sustainable Mobility business, which includes its renewable diesel assets, Jefferies said.
Jefferies concluded: "At our valuation, the sale of a 20-30% stake in Plenitude would generate €2-3bn divestment proceeds for Eni."
Eni is scheduled to announce its earnings for the second quarter of 2023 this Friday.
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