Total Spanish Sell Off A Prelude To Cepsa Bid

Total Fina Elf's planned sale of its Spanish filling stations may be a prelude to an acquisition of Compania Espanola de Petroleos SA, Spain's second largest oil company, investors and analysts have said.

The sale last week by Europe's largest fuel retailer may be an attempt to head off antitrust objections if Total decides to raise its forty five percent stake in Cepsa, analysts said. A Total Fina executive said in May the French company would be interested in increasing that holding.

Cepsa shares have gained forty eight percent this year, boosting the company's market value to 5 billion euros ($4.9 billion), on expectations of a takeover. By taking control of Cepsa, Total Fina may be able to raise margins at its filling station business and deepen cost cuts at its oil-refining and marketing unit.

“This is heating up the issue of whether Total could end up taking over Cepsa,” said Enrique Blasco, who helps manage 650 million euros at Gesmadrid.

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