Danone launches rights issue to cut debt

* Shareholders can buy 4 new shares for every 17 held

* Price 24.73 eur/shr, discount of 31 pct

* Subscription runs from June 1 until June 12

(Adds detail)

PARIS, May 29 (Reuters) - Danone (DANO.PA) launched the sale of new shares to its shareholders aimed at raising 3.05 billion euros ($4.23 billion) to cut debt, buy smaller rivals hurt by the financial crisis and grow through the economic downturn.

The French food group is offering shares at a subscription price of 24.73 euros, a 31 percent discount to Thursday's closing price of 36.025 euros, it said on Friday.

Shareholders of the world's biggest yoghurt maker will be able to subscribe to 4 new shares for every 17 shares held, Danone said in a statement. The subscription period will run from June 1 until June 12.

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. [nLF404912]

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. [nL1216745] [nLK521306]

Danone said earlier this week its first rights issue in 22 years would mainly be used to cut its debt. Net debt reached 11.26 billion euros at the end of 2008 after its 12.3 billion purchase of Dutch food maker Numico in 2007.

Danone sought to reassure investors the rights issue was not meant to cover the cost of repurchasing 44 percent in Danone Spain from minority shareholders, following the death of leading shareholder and founder of Danone in France Daniel Carasso, aged 103, earlier this month. There was a group of shareholders around Carasso with 44 percent of Danone Spain.

French investment company Eurazeo (EURA.PA), the top shareholder in Danone with over 5 percent, said on Thursday it planned to subscribe to the rights issue, subject to the final terms of the sale. Eurazeo is issuing bonds that can be converted into Danone shares.

Sofina and Predica have also committed to subscribe in proportion to their existing shareholding, Danone said.

Danone stock is down around a fifth so far this year, lagging the DJ Stoxx food and beverage index .SX3P, up 2.3 percent.

Danone on Monday reiterated its 2009 sales and margin goals and kept its forecast for underlying, fully diluted earnings per share (EPS) at constant exchange rates to rise 10 percent this year, excluding the dilutive effect of the issue of new shares.

The company said the rights issue would lead to a 10 percent full-year EPS dilution.

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($1=.7207 Euro)

(Reporting by James Regan; editing by Marcel Michelson)

((james.regan@thomsonreuters.com; +33 1 49 49 53 84; Reuters Messaging: james.regan.reuters.com@reuters.net))

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