LUKOIL circles Repsol, deal hinges on Sacyr

By Sonya Dowsett and Dmitry Zhdannikov

MADRID/MOSCOW (Reuters) - La Caixa said on Friday it was talking to Russia's LUKOIL (LKOH.MM) about a possible sale of part of its stake in Repsol YPF (REP.MC), a deal that could put a large chunk of Spain's biggest oil producer in Russian hands.

A financial source with close ties to LUKOIL said Russia's No.2 oil producer is interested in buying a large stake in Repsol and has been holding talks about a possible purchase for the past four years.

La Caixa, whose holding company Criteria (CRIT.MC) owns 14 percent of Repsol, said any sale hinged on Spanish builder Sacyr Vallehermoso (SVO.MC) agreeing to sell its 20 percent stake in Repsol to LUKOIL.

The Spanish savings bank is discussing the sale of around 6 percent of Repsol, a source familiar with the talks said, which the Russian producer hoped to add to Sacyr's 20 percent and 2 percent from insurer Mutua Madrilena.

Shares in Sacyr, Criteria and Repsol all moved higher on the news of the talks, though analysts questioned whether LUKOIL would be able to raise financing for a deal of that scale.

Sacyr was 9.8 percent higher at 8.1 euros at 8:13 a.m. EST as the prospect of offloading its Repsol stake to relieve its stretched balance sheet pleased investors. Criteria was 9.4 percent higher and Repsol was 4.9 percent higher at 14.3 euros.

LUKOIL, 20 percent owned by U.S. oil major ConocoPhillips (COP.N), was 3.31 percent lower at 798 rubles.

LUKOIL declined to comment on the matter. Repsol said it was not aware of any share sales. Mutua Madrilena has declined to comment.  Continued...