Argentina's YPF Shares Rally after Slim's Acquisition
06/15/2012| 12:38pm US/Eastern
--YPF shares rally after Slim obtains minority stake
--YPF stock has plunged since Argentina seized a 51% stake in the company
--YPF is sitting on vast shale natural-gas and oil resources
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By Ken Parks
BUENOS AIRES--Shares of Argentina's largest oil and natural-gas company, YPF SA (YPF, YPFD.BA), rose as much as 20% in early trading Friday after Mexican billionaire Carlos Slim acquired an 8.4% stake in the company.
YPF's American depository shares were up 19.5% in New York at $12.49 just after noon EDT, after hitting $12.54 earlier in the session. The stock is still a far cry from its 52-week high of $46.60.
On Thursday, YPF said Mr. Slim acquired a minority stake in the company through his bank, Banco Inbursa SA, and a related company, Inmobiliaria Carso SA.
Mr. Slim is famous for buying into undervalued or struggling companies that have significant potential.
In this case, YPF is sitting on vast shale oil and natural-gas resources, but it needs to find deep-pocketed strategic investors to commit billions of dollars to bring its hydrocarbon riches into production.
YPF recently disclosed a five-year plan to invest $35 billion to raise oil and gas output, but analysts have said it remains unclear where that money will come from.
YPF's shares have fallen this year after Argentine President Cristina Kirchner seized a 51% stake in YPF last month from its former controlling shareholder, Spain's Repsol YPF SA (REP.MC, REPYY).
Ms. Kirchner has axed YPF's dividend and pledged to reinvest all profits back into the company to reverse years of declining production.
Repsol has called the expropriation illegal and is fighting it in the courts. The Spanish oil company still has one director on YPF's board.
Write to Ken Parks at firstname.lastname@example.org.