French media giant Lagardère sells entire stake in EADS for $2.97 billion
09 Apr 2013
French media giant Lagardère SCA has exited from Airbus owner European Aeronautic Defence & Space Co (EADS) by selling its entire 7.4 per cent stake for €2.28 billion ($2.97 billion).
The Paris-based company, controlled by businessman Arnaud Lagardere, had said late last year that it would soon sell its stake in EADS and focus on its various media and travel retail assets. It had added that it would use proceeds from the sale to pay a one-time dividend and reduce debt.
Lagardère sold its 61 million shares for €37.35 each, a 3.5 per cent discount to Monday's closing price of €38.71.
''EADS has participated to this placement for a total amount of circa 500 million Euros, at the price of the book,'' Lagardère said in a press release.
EADS has bought back a 1.61 per cent stake worth €500 million in the private placement. The purchase is part of its wider share-buyback program announced late last year.
Lagardère, the owner of magazines like Elle and Paris Match, had in December 2012 said that it sell its stake in EADS after France and Germany agreed to change the company's shareholder structure to reduce government influence.
The sale was put in motion late last year when France and Germany agreed to change the company's shareholder structure to reduce government interference and cap their holdings at 28 percent.
Lagardere's sale will see German carmaker Daimler also exiting from the aerospace group, which will see Germany and France holding about 12 per cent stake each in EADS, and Spain 4 per cent.
EADS, which came into being following the 2000 merger between Aérospatiale-Matra, DaimlerChrysler Aerospace AG, and Construcciones Aeronáuticas SA, emerged as a symbol of Franco-German-Spanish integration alongside the euro, but within half a decade it had become the focus of industrial tensions between the three main euro zone economies.
Media had earlier speculated that Qatar Investment Authority, the country's sovereign wealth fund, which owns 13 per cent of Lagardère, would buy into EADS.
EADS is a very profitable defence contractor. It has a market cap of $31.4 billion and generated net profit of $1.6 billion in 2012 on revenues of$ 73.7 billion.