Galp Shares Fall 10.84% After Moeve Talks End as Adjusted Profit Rises

Galp and Moeve ended negotiations Oct. 26 over a proposed combination of downstream businesses in the Iberian Peninsula after failing to agree on final terms that met both sides’ strategic and financial criteria. Galp shares closed down 10.84% in Lisbon that day, even as the company reported higher adjusted third-quarter earnings.

Galp closed at €20.47, down €2.49 from its previous close. The companies did not identify which terms remained unresolved.

Galp’s replacement-cost-adjusted (RCA) net income rose 68% to €682 million in the third quarter from €407 million a year earlier. RCA EBITDA increased 67% to €1.522 billion from €911 million.

On an International Financial Reporting Standards (IFRS) basis, net income fell 24% to €201 million from €264 million. Galp also reported €453 million in special items. The RCA and IFRS figures use different accounting measures.

The negotiations followed a nonbinding proposal announced in January to combine downstream operations covering refining, chemicals, trading, low-carbon fuels and fuel retail. The plan envisioned separate industrial and retail platforms, with the retail platform bringing together about 3,500 service stations. Galp’s upstream operations and renewables were outside the proposed combination.

The proposal was subject to binding agreements, corporate approvals and regulatory authorization. Galp and Moeve’s discussions ended without an agreement. Galp co-CEOs Maria João Carioca and João Marques da Silva said, “Galp's strategic direction and investment proposition remain unchanged.”