Danone raises $4.23 billion in capital increase

PARIS (Reuters) - Danone (DANO.PA) said on Tuesday it had raised 3.05 billion euros ($4.23 billion) in its first capital increase in 22 years, as the French food group aims to cut debt and buy smaller rivals hurt by the financial crisis.

Danone said it had sold 123.2 million new shares for 24.73 euros each -- representing a 31 percent discount to the stock's closing price a day before the rights issue was announced on May 29 -- in an offer that was 182 percent oversubscribed.

Shareholders of the world's biggest yoghurt maker were able to subscribe to 4 new shares for every 17 shares held.

The discount is less than that seen in other billion-euro rights issues in France this year. Drinks group Pernod Ricard (PERP.PA) last month raised about 1 billion euros by selling shares at a 36 percent discount.

French cement group Lafarge (LAFP.PA) and building materials group Saint-Gobain (SGOB.PA) held rights issues of 1.5 billion euros with even deeper discounts.