From the decree on liberalization and in particular from the reforms of the energy sector there could be good news for Eni. At least that's what Eric Knight, founder and CEO of the activist fund, thinks Knight Vinke asset management (Kvam), which owns between 1% and 1,5% of the capital of the Italian energy giant – a market value between 670 million and 1 billion euros.
This was stated by a source close to the fund, who confirmed Eric Knight's words to Corriere della Sera ("Knight Vinke has not lost sight of the Eni-Snam dossier"), underlining that he sees the spin-off of Snam as an excellent opportunity to Eni. The sale of the majority – Eni's share should in fact fall below 20% – pIt could yield the company led by Paolo Scaroni almost 6 billion euros, but it could also allow it to deconsolidate 11,5 billion euros of debt out of the 25,5 billion net debt expected by the end of 2011.
The Council of Ministers should confirm the provisions of the draft circulated yesterday. After 6 months from the entry into force, a further decree should be issued to fix the new structure of Snam, which will give Eni 2 years to reduce the stake to 20%. This lengthy procedure raises many concerns in the activist fund. According to Kvam, Eni will have to be faster than the market which "this time cannot be deceived and will draw the consequences in the event of delay or default".
According to the American fund, Eni's stock is between 35% and 70% undervalued. TO Business Square the action of the six-legged dog oscillates between the negative and the positive. Around 13.00 it lost 0,7% to 17,08 euros. On the other hand, Snam rete gas is in net red, losing 0,91%.
