Eni’s (ENI.MI) competitors are probably green with envy. After a long search for investors, the $57 billion Italian oil major agreed on Thursday to sell a stake in its retail-and-renewables arm Plenitude, valuing it at 10 billion euros including debt. That’s the top of the range CEO Claudio Descalzi was hoping to secure as he forges ahead with multiple spinoffs to unlock value. Asset manager Energy Infrastructure Partners (EIP) is set to pay 700 million euros to own 9% of Plenitude’s equity.
At nearly 10 times Plenitude’s likely 2024 EBITDA of just over 1 billion euros, EIP is pricing the business at over three times Eni’s own valuation. It’s also well above green energy leaders like Iberdrola (IBE.MC), Naturgy Energy Group (NTGY.MC) or wind champion Orsted (ORSTED.CO), which trade at between 8 and 9 times next year’s EBITDA. That’s striking because Plenitude currently derives only 20% of its EBITDA from clean power, with the rest coming from selling gas and electricity to retail customers.
If Plenitude manages to hit its targeted EBITDA of 1.8 billion euros by 2026, it could be priced at over 12 billion euros on the 7 times peer multiple for that period. But investors may want firmer signs that this big step-up in profitability will materialise. If Eni wants to list its green arm at a higher level, it should probably hold fire for now. (By Lisa Jucca)
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