Criteria and TAQA End Negotiations on Naturgy Takeover

Spanish holding firm Criteria and Abu Dhabi's TAQA have terminated negotiations for a potential takeover of Spanish gas company Naturgy. Despite earlier reports suggesting TAQA had abandoned the bid, no agreement was reached. Criteria is now exploring other options to support Naturgy's transformation plan while reaffirming its long-term commitment.

Spanish holding firm Criteria on Monday said it had not reached an agreement with Abu Dhabi's TAQA over a potential joint takeover bid for Spanish gas firm Naturgy. El Mundo newspaper had earlier reported, citing people familiar with the talks, that TAQA had decided to drop the joint bid with Criteria, which owns a 26.7% stake in the gas company.

"Regarding the conversations held between CriteriaCaixa and TAQA with a view to a possible cooperation agreement relating to Naturgy ... these negotiations have been terminated without reaching any agreement," Criteria said in a filing to market supervisor CNMV. Criteria added it was "exploring new options" to support Naturgy's transformation plan and reaffirmed its commitment as a long-term investor in the company's industrial project.

Naturgy declined to comment while TAQA was not immediately available for comment. TAQA was in talks with Naturgy's three largest shareholders - Criteria and private equity funds CVC and GIP, which each own more than 20% - with a view to a possible takeover bid, it said in April.

It then said there was no guarantee a deal would happen and, if it were to, under what terms. It added it had not approached Naturgy directly. CVC and GIP declined to comment. Australian fund IFM, which holds a 15% stake in Naturgy, declined to comment.

TAQA, a power and water utility founded in 2005, was set to acquire Spain's largest gas firm, together with contracts with Algeria and also a long-term contract to import some 3 billion cubic metres (bcm) of Russian liquefied natural gas (LNG) every year. With Naturgy's market value at 24.3 billion euros ($26.14 billion) on Monday, the move would have been one of the largest takeovers by a sovereign wealth fund. ($1 = 0.9297 euro)