Eni Advances After Libya Says It May Purchase Stake

By Flavia Krause-Jackson and Maher Chmaytelli

Dec. 8 (Bloomberg) -- Eni SpA surged in Milan trading after the Italian government said the Libyan Energy Fund is interested in buying a stake in Italy’s biggest oil company.

Eni climbed as much as 11 percent to 17.04 euros, its biggest intraday gain since Nov. 24, and was trading up 1.45 euros at 16.84 euros, as of 10:17 a.m. local time.

“The Libyan government has indicated to the Italian government an interest in acquiring a share in the capital of Eni,” according to a statement on the government’s Web site posted Dec. 6. Libya said it will not “interfere in the company’s management in any way.”

Oil-rich nations have been showing greater interest in European companies after the financial crisis led to plummeting market values. European leaders such as French President Nicolas Sarkozy and Italian Prime Minister Silvio Berlusconi have suggested oil-producing countries might try to exploit falling share prices to bid for domestic companies.

The Italian Finance Ministry controls about 30 percent of Eni, which employs about 76,000 workers worldwide. Libya could buy as much as 10 percent of Eni for as much as 9 billion euros ($11.5 billion), Il Sole 24 Ore said yesterday, citing Libyan Ambassador to Italy, Hafed Gaddur. Eni said “it will provide the market with information on its shareholdings in line with regulations.”

Libya will buy shares of Eni “when the market is right,” the North African nation’s top oil official said today in an interview.

‘Expressed Our Interest’

“Eni is one of the opportunities we’re looking at, we expressed our interest to the Italian government and we will buy shares when we feel the market is right,” Shokri Ghanem, the head of Libya’s National Oil Corp., said in a telephone interview from Tripoli. He declined to specify the price at which Libya would buy shares.

In Italy, Libyan sovereign funds are discussing a possible investment in Telecom Italia SpA, Saif al-Islam Qaddafi, son of Libyan leader Muammar Qaddafi, said at a conference on Oct. 30. Libyan investors in October increased their stake in UniCredit SpA to at least 4.9 percent to become the Italian bank’s second- biggest shareholder.

Italy is the biggest trading partner of Libya, its former North African colony.

Italy’s benchmark S&P/MIB Index has fallen 53 percent this year and hit an all-time low on Dec. 5.

To contact the reporters on this story: Flavia Krause-Jackson in Rome at fjackson@bloomberg.net