Vitol wants 40% of Moratti's Saras: the stock is running high on the stock exchange
The giant in the raw materials sector Vitol showed up at the door of the Moratti family with the intention of acquiring 40% of Saras, the company that manages the Sarroch oil refinery in Sardinia, one of the largest in Europe in terms of production capacity. The news was disclosed by Bloomberg, triggering a rapid reaction on the stock market with an increase in the stock which reached almost +5%, before closing around 1% higher, at 1.66 euros. The operation is expected to take some time, but according to the rumors gathered, Vitol's interest is concrete and there are also other potential buyers interested in the company led by president and CEO Massimo Moratti. This is what was reported by Il Giornale.
The Italian company has already seen the entry into its capital in 2020 of another giant in the sector, Trafigura, which has gradually increased its share up to 15%., and then reduced it to 10% earlier this year. According to Equita analysts, the recent reduction in Trafigura's stake has decreased the speculative attractiveness of the stock and could indicate difficulties in finding buyers for the majority stake. Equita also underlines that the sale of the controlling stake is complicated by the uncertainty regarding possible government intervention, especially considering the context of the recent sale of the Priolo plant to Goi Energy.
Despite the challenges, experts are already evaluating the possible deal numbers. Before the pandemic, mergers and acquisitions in the refining sector they have typically valued companies at eight times the ratio of enterprise value to gross operating margin. Applying this multiple to Saras' refining sector alone, the potential value of the stock could exceed 2 euros per share. Saras, which has a market capitalization of around 1.6 billion euros, recorded revenues of 15.8 billion in 2022. However, in the first nine months of 2023, the company showed signs of weakness, with revenue down 29% compared to the same period in 2022 and a 42% drop in profit to €260.7 million.
For its part, Vitol is a company based in Switzerland and the Netherlands that is among the world's leading commodity tradersand, with refineries in Europe, the Middle East and Australia. In 2022, it recorded revenue of 505 billion euros, brokering 7.4 million barrels of oil and refined products, achieving a profit of 15 billion euros. This gives it considerable liquidity which fuels its investment ambitions. Analysts believe that Vitol is motivated by strategic and economic reasons, linked to Saras' position in the Mediterranean and the challenges in supplying diesel to Europeafter the embargo against Russia and the difficulties of transit through the Suez Canal.
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