(Bloomberg) -- Naturgy Energy Group SA slumped the most since March 2020 after two key investors abruptly ended talks to acquire the Spanish utility — a move that threatens to revive longstanding shareholder tensions at the company. 

Abu Dhabi National Energy Co. and Criteria Caixa SA ended discussions “without any agreement,” Criteria said in a regulatory filing Monday. Naturgy shares declined as much as 13% on Tuesday.  

The talks collapsed after the Abu Dhabi-based company — known as Taqa — made additional demands on corporate governance and shareholder control, according to a person familiar with the matter. Criteria rejected the demands, saying they weren’t in line with the original memorandum of understanding between the two parties, the person said.

A Taqa spokesperson didn’t respond to call seeking comment.

The end of the discussions underscores tensions between Naturgy’s four largest shareholders, who for years have battled to squeeze more value from the natural gas and renewable energy company. Investors are increasingly focused on the sector as the world transitions away from fossil fuels.

Shareholder Rift

Criteria announced in mid-April that it was in “preliminary talks” with a potential investor to jointly take control of the utility. The firm owns about 27% of Naturgy, while Global Infrastructure Partners and CVC Capital Partners each own about 20%. Australian infrastructure group IFM holds about 15%.

Taqa subsequently said it was in talks with GIP and CVC to buy their stakes. Criteria and Naturgy management have long clashed with the other shareholders over strategy. Bringing Taqa on board to buy out GIP and CVC was seen as a way to ease those tensions. 

A takeover deal likely would have drawn scrutiny from the Spanish government, which has the power to veto acquisitions of stakes greater than 10% in companies deemed as strategic. Naturgy, valued at about €24 billion ($26 billion), is the nation’s biggest natural gas firm and a key energy provider in both Spain and a number of other countries.

The government has also been restrictive on what shareholders can or cannot do. It already curbed Naturgy’s attempt to split itself to separate its power networks and energy businesses. 

On Monday, Criteria reiterated its commitment as a long-term investor in Naturgy and said it’s still talking with other potential partners.

(Updates with details of talks, share price.)

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