This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Family Shareholders Cede Control of Peugeot

NEW YORK (The Deal) -- France's Peugeot family has let go of the wheel, relinquishing control of PSA Peugeot Citroen, 204 years after their forebears founded the coffee mill and bicycle maker that would become Europe's second-largest carmaker.

Peugeot said Wednesday, Feb. 19, it will launch a widely anticipated 3 billion ($4.12 billion) capital increase, reducing the founding family's stake to 14%, equal with new partners Dongfeng Motor Group, of China, and the French state.

Under the terms of the share sale Dongfeng and France will each pay 525 million for a reserved parcel of shares before participating in a 1.95 billion capital increase available to all existing shareholders. Shares will be sold at 7.50 each, a 40% discount to their Tuesday closing price.

"We are giving a new impetus to our group, with an ambitious industrial and commercial plan, and solid financial resources," Peugeot Chairman Philippe Varin said in a statement.

Dongfeng and the French state will each invest a total of 1.1 billion for their stakes and will be handed a third of the positions on a new supervisory board, leaving the Peugeot family's holding companies to appoint the final third of the seats.

In addition to the capital increase, Peugeot said it will take in as much 1.5 billion by 2018 from a new motor vehicle financing joint venture agreed with Banco Santander. The new venture will be launched in mid-2015 to provide loans across 11 European companies through Peugeot's Banque PSA Finance, which will be separated from the carmaker.

Wuhan-based Dongfeng is China's No. 3 passenger carmaker and its No. 2 commercial vehicle maker. Its investment underpins a new partnership that Peugeot hopes will expand sales in China, the world's fastest-growing car market, and deliver about 400 million of annual synergies.

China will become Peugeot's biggest market by volume by 2015, the carmaker said in a presentation on Wednesday.

Peugeot posted a net loss of 2.3 billion for 2013, from revenue of 54 billion. It had net debt of 4.15 billion at the end of December, up from 3.15 billion a year earlier. The carmaker said Wednesday that it had renewed a 2.7 billion credit line with nine banks.

The company had 6.6 billion in cash at the end of the year and 3.6 billion in undrawn credit facilities.

Shares in Peugeot traded as high as 13.62 early on Wednesday in Paris before losing ground to trade at 12.82, up 0.32, or 2.6% on their Tuesday close. The company has a market capitalization of 4.39 billion. Dongfeng's Hong Kong listed shares closed Wednesday at HK$10.82, down HK$0.14, or 1.4%, on their Tuesday close. Dongfeng has a market capitalization of HK$93.4 billion ($12 billion).

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,778.15 +421.28 2.43%
S&P 500 2,061.23 +48.34 2.40%
NASDAQ 4,748.3960 +104.0840 2.24%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs