Abu Dhabi fund IPIC has abandoned talks to buy 36 per cent of Spanish oil group Cepsa from Banco Santander and Union Fenosa, daily El Economista said on Friday, citing sources involved in the talks.

Cepsa and Banco Santander declined to comment on the report, which said IPIC decided not to raise its 45 euros per share offer for the stake due to the global economic and financial crisis.

Banco Santander holds 31 per cent of Cepsa and was also negotiating on behalf of Fenosa, which has 5 per cent of the oil group. IPIC already owns 9.5 per cent, and France's Total has 48 percent.

Cepsa shares, which have a small free-float, were trading at 69 euros on Friday, valuing the company at about 18.5 billion euros ($25.39 billion). At 45 euros, Santander's 31 percent stake would fetch about 3.7 billion euros.

Sources close to the talks told Reuters in September that Santander disagreed with IPIC's offer for the stake and wanted more.

El Economista reported that Santander would only sell the stake at 55 euros per share, an offer that IPIC's representatives took back to Abu Dhabi for the emirate to consider but which was finally rejected.-Reuters