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IBERIAN DAILY 08 DECEMBER (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: GRUPO CATALANA OCCIDENTE, REPSOL.

The Fed continues to favour markets
Stock markets rallied last week, trading near November’s highs after the probability of rate cuts by the Fed at Wednesday’s meeting rose to 92%. In the STOXX 600, Autos and Retail (after Inditex released results) led the gains last week whereas Insurance and Real Estate were the worst performers. On the macro side, in the euro zone the final 3Q’25 GDP remained at the preliminary 1.4% YoY, in line with the consensus. In Spain, October’s industrial output slowed down to 1.2%. In Germany, the Parliament’s lower house approved the draft on the pension system with 319 votes in favour. In the US September’s real personal outlays stagnated and September’s personal consumption deflator rose to 2.8%, in line with expectations whereas the core data moderated one tenth unexpectedly. Lastly, the University of Michigan consumer confidence for December climbed more than expected. On the corporate front, D. Trump outlined the possibility of monopolistic concentration problems in the acquisition of Warner Bros by Netflix Inc. valued at US$ 72 Bn. In Japan, the final 3Q’25 GDP deteriorated one tenth more than expected. In China, exports rose more than expected in November whereas imports climbed less than expected, with the trade surplus exceeding US$ 1 Trillion for the first time this year. In this regard, E. Macron warned that the EU could take tariff measures if China does not correct its trade unbalance. On the geopolitical front, China will prioritise the stimulus of domestic demand through an active fiscal policy and moderately easing monetary policy, as has been the case thus far.
What we expect for today
European stock markets would open with a negative slant of -0.10%, consolidating current levels. Currently, S&P futures are down -0.23% (the S&P 500 ended up +0.1% vs. the European closing bell). Asian markets are climbing (China’s CSI 300 +0.91%, Japan’s Nikkei +0.34% and Korea’s Kospi +1.34%).
Today in Germany we will learn October’s industrial output and in the euro zone December’s SENTIX index.

COMPANY NEWS

GRUPO CATALANA OCCIDENTE. InocSA obtains 98% acceptance and the company will be delisted. ACCEPT THE BID
InocSA, its majority shareholder (62.03% capital), has gained the control of 97.83% of GCO’s shareholding structure and on 30/12 it will exercise the squeeze-out right on the 2.19% stake that did not accept the bid (the delisting will take place on 02/01/2026). Note that on 28/04 InocSA announced a voluntary TOB with two alternatives: (i) cash payment that after the rise totals € 49.75/sh. or (ii) a swap for shares in InocSA (1 InocSA share x 43.9446 GCO shares). 38 M GCO shares have accepted the cash alternative and 4.94 M shares the swap formula. The delisting take-over bid is expected as it has exceeded the minimum level announced of 75%.

REPSOL. Repsol and HitecVision merge their upstream business with TotalEnergies in the UK. OVERWEIGHT
NEO NEXT Energy, a JV between Repsol and HitecVision, has just announced a strategic agreement with TotalEnergies to merge their UK offshore oil & gas production businesses. The transaction will cement NEO NEXT’s position as the leading operator and producer in the UK Continental Shelf with an expected 2026 production of over 250,000 barrels of oil equivalent per day. Upon completion, the combined company will be known as NEO NEXT+. Completion of the transaction remains subject to approvals from the relevant authorities and regulatory consents and is expected during the first half of 2026. The deal makes strategic sense for REP to obtain operating improvements and to maximise the value of its upstream assets in the UK. Note that REP’s current JV with Neo Energy signed in March would be valued at around € 1.7 Bn, 4.5% market cap for the 45% stake controlled by REP (with a joint output of around 130,000 b/d for 2025e, 10% of the total with its 45% stake), and thus this new alliance allows the company to almost double the production capacity, thus increasing valuation and improving efficiencies.