Credit Agricole set to raise $1.8 bln from Suez stake

By Sudip Kar-Gupta

PARIS (Reuters) - French bank Credit Agricole said it would sell a 2.07 percent stake in utility Suez, a move that could raise around $1.8 billion to help shore up its capital position amid tough market conditions.

France's biggest retail bank said it would place the shares in the market with institutional investors.

The bank said it would sell 27,014,040 Suez shares. It will place an initial amount of 24,558,219 shares and there will then be an over-allotment option of further shares.

Shares in Suez, which is in the process of merging with Gaz de France <GAZ.PA, closed at 46.41 euros on Friday but market sources said the stake would be placed within a range of 43.75-45 euros. Calyon and Deutsche Bank are handling the sale.

A banking industry source later said the final price of the placement had been set at 45 euros -- the top of the range. At that price, the stake sale would raise around 1.2 billion euros ($1.78 billion) for Credit Agricole.

Suez shares at one point fell as much as 5 percent but the stock later recovered. The shares were down 0.6 percent in late afternoon trade at 46.15 euros.

Their fall also dragged down the shares of merger partner Gaz de France (GDF), which were down 1.2 percent and were among the main losers on France's benchmark CAC-40 index.

Credit Agricole shares were down 0.3 percent. The CAC-40 index was up 0.8 percent, while the DJ Stoxx European bank sector was up 0.5 percent.