France is seeking buyers for as much as 1.79 billion euros ($2.44 billion) of shares in GDF Suez SA (GSZ), the nation’s biggest natural gas distributor, as the government seeks to raise funds to buy a stake in Alstom SA.
The government has started a process to sell a 3.1 percent stake in GDF Suez, or 75 million shares, and may raise that to 3.6 percent, or 86 million shares, through an accelerated institutional placement, Finance Minister Michel Sapin and Economic Minister Arnaud Montebourg said in a joint statement today.
“The sale is part of a policy to actively manage the state’s holdings,” the ministers said. Under an agreement announced June 22, the government will buy as much as 20 percent of Alstom from Bouygues SA (EN), allowing General Electric Co. (GE:US) to overcome a last hurdle for its $17 billion purchase of Alstom’s energy assets.
Selling the stake may reduce the government’s ownership below a required one-third threshold. France is the biggest shareholder in GDF Suez with a 36.7 percent stake, according to data compiled by Bloomberg. State-owned bank Caisse des Depots et Consignations owns 1.9 percent.
The government is required to own third of the capital of GDF Suez. It will use a law that permits it to fall below that threshold as long as it retains at least one third of the voting rights, according to the ministers’ statement.
GDF Suez closed at 20.81 euros today. The government may sell its stake at a price ranging from 20.18 euros to 20.81 euros a share, according to terms obtained by Bloomberg News. The joint book runners are Citigroup Inc., Bank of America Corp., Societe Generale SA (GLE) and Goldman Sachs Group Inc. (GS:US)
Montebourg said the government has 2 billion euros from previous sales of stakes in aircraft engine maker Safran SA and airport operator Aeroports de Paris that may also be used to acquire the Alstom stake.
This money “has to be used either to reduce debt or reinvest and we’re reinvesting,” the minister said in parliament today.
Before GE announced the Alstom deal, France passed legislation extending the government’s ability to block foreign takeovers into the fields of energy, transport and health care. The stake in Alstom and a joint venture with GE for steam turbines used for nuclear reactors, which are part of the GE deal, are aimed at allowing the state to keep a hand in energy assets it considers strategic.
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