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Sempra
488 8Th Avenue
Phone: (619) 696-2000p:619 696-2000 SAN DIEGO, CA  92101  United States Ticker: SRESRE


Sempra Energy prepares to delist from IEnova at the BMV


US-based Sempra Energy seeks to launch a Public Procurement Offer (OPA) for 30% of IEnova's shares among the mexican stock exchange (BMV) investor public.

Sempra Energy holds the rest of IEnova's BMV-listed securities, so it would have 100% of the Mexican company's papers.

After the OPA It seeks to create a new company called Sempra Infrastructure Partners, which would be the result of the merger of IEnova with Sempra LNG.

In a statement, issued in San Diego, California, Sempra reported that after the merger he would seek to list some of his shares in the BMV.

The company estimates that by the end of the first quarter of 2021 the entire process will be completed, to receive the corresponding permits.

"We are excited to list Sempra Energy's actions at the BMV (...) We believe that Sempra Infrastructure Partners is well positioned to be a leader in the global energy transition and our plans to trade on the local stock exchange affirm our commitment to Mexico and the desire to continue investing in the country," Jeffrey W. Martin, president and CEO of Sempra Energy, said in the paper.

The news, released before the opening of the local market, boosted IEnova's shares that reached almost 15%, to 81.70 pesos. In the end the rise was moderated and closed with an increase of 11.35% to 79.28 pesos. Meanwhile, Sempra Energy'sNew York-listed shares rose 2.87% yesterday, December 2, to reach a price of $131.43.

IEnova reported that it received a non-binding proposal from Sempra Energy, its U.S. parent company, which will pay a price of 82 pesos for each of the OPA's shares, implying a prize of 11.6 and 22.6% compared to the price of IEnova's last 30 and 90 days.

However, at the price of the closing of the energy company's stock on Wednesday, investors' profit would be 3.43% when selling their shares.

Marissa Garza, Director of Stock Analysis at Banorte, explained that the OPA amounted to about $1.9 billion and for each IEnova stock, investors will receive Sempra's $0.0313 degree.

"Sempra Energy's proposal follows the punished valuation that IEnova is currently listing. Although this news opens up an interesting link to continue investing in energy through the BMV," he opined.

Attractive transaction

In one analysis, Monex Casa de Bolsa detailed that before the news was made known, the BMV station was trading at a Multiple FV/Ebitda (company value between operating flow) of 11.9 times, a level involving a discount of 8.8 and 16.7% of the last 3 and 5 years, respectively, relative to the average multiple.

"This validates the station's attractive valuation, so we'll keep an eye on that transaction and review the target price and recommendation of the action," Monex added.

Israel Hurtado, energy lawyer and founder of the Mexican Hydrogen Association (AMH), explained that the operation planned by Sempra Energy reflects the potential appeal of the Mexican energy sector. "This type of acquisition is a good sign for the market, especially because of the adverse circumstances of recent months by a series of litigation and protections," the specialist said.

He even remembered that IEnova had to sit down and renegotiate with theMexican authorities the terms of the contract for the transport services of the Guaymas-El Oro pipeline.

"With this operation Sempra sends a message of commitment and confidence in the development of the Mexican energy sector. Maybe they're looking beyond what the market itself observes," he added.

Hurtado explained that there is "appetite" of foreign investors for investing in the energy sector in Mexico, since the potential it has, given its natural resources such as sun and wind, goes beyond an administration.

IEnova is one of the largest private energy companies, developer and operator of pipeline, storage and renewable energy infrastructure in Mexico, with $9.6 billion in total assets reported at the end of 2019.

Sempra Infrastructure Partners seeks to scale the company's infrastructure business in North America, as it will focus on the development and construction of liquefied natural gas export infrastructure in that region, natural gas infrastructure and renewable energy generation.

Sempra Energy said it will "sell a non-controlling stake in Sempra Infrastructure Partners to finance its growth and highlight the value of the company's overall portfolio."

IEnova is the only company in the energy sector listed on the S&P/BMV IPC, the most representative stock index.

With his eventual deslistment, he would join the four stations that are close to leaving the stock market: the Benavides Pharmacy chain; Bio Pappel, a paper manufacturer; general insurance and ingeal, former owner of the Mac'Ma cookie brand.

In addition, it will be one of the most stock market companies to be delisted. In September 2019, Santander España launched an OPA to keep 100% of Santander Mexico, however, it only managed to increase its stake to 91.65%, having acquired 8.35% of shares as a result of that offer, so the latter is still listed in the BMV.

judith.santiago@eleconomista.mx


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