French government to cut stake in Valeo
PARIS (Reuters) - The French government is to reduce its stake in car parts maker Valeo (VLOF.PA), reversing a move it made five years ago as part of its attempts to shore up the crisis-hit car industry.
State fund Bpifrance said it had began the process of selling about 2 million shares or 2.5 percent of the company's capital in a private placement. That would leave Bpifrance with 3.3 percent stake in Valeo. Valeo's shares closed at 101.1 euros on Tuesday.
"I am grateful to Bpifrance Participations for having taken a stake in our capital at a key moment in Valeo's history, in the midst of the crisis in 2009," Valeo's CEO Jacques Aschenbroich said in a statement.
The stake sale amounts to around 201 million euros ($278.72 million) based on Valeo's market value of 8.04 billion euros ($11.15 billion) at the market close on Tuesday.
Shares in Valeo have risen more than nine-fold since end-2008, as a North American auto rebound helped the company ride out of six-year European market slump.
Bpifrance said it made the decision because the company now enjoyed a position as a strong player in the world automobile industry and had a "strong and stable shareholder base".
The stake sale will not result in any changes to Bpifrance participation in Valeo board of directors, as the investment fund will still hold more than 5 percent of Valeo voting rights, Bpifrance said.
Bank of America Merrill Lynch and Credit Agricole CIB are lead managers of the placement.
($1 = 0.7212 Euros)
(Reporting by Laurence Frost, additional reporting by Matthieu Protard, writing by Maya Nikolaeva; Editing by Andrew Callus)