With PSA Peugeot Citroen’s supervisory board’s blessing, CEO Philippe Varin is continuing talks with partner Dongfeng regarding the stock sale to both the Chinese automaker and the French government.
In a release made by the French automaker this week, the board expressed their full support for the plan, with the aim for approval by February 18, though the board also said that a successful completion of the plan wouldn’t be guaranteed.
The restatement of the sale, alongside a planned capital increase, came on the heels of reported divisions among board chairman Thierry Peugeot and his cousin, Robert Peugeot, over the $4.1 billion deal; Thierry wanted to sell all of the new stock on the market without Dongfeng or the French government. Meanwhile, the French shareholders’ rights group ADAM voiced concerns over the issue of two major shareholders governing PSA leading to governance issues, stock dilution, and the possibility of a mandatory buyout of the remaining shareholders by the three majors.
The sale would each give Peugeot, France and Dongfeng a 14 percent holding, with the latter two paying just over $1 billion a piece for their holdings. The overall plan would be equal to 75 percent of PSA’s market value, and would help the automaker weather the ongoing sales slump that began in 2012. This follows a similar sale made to General Motors in the same year for $1.35 billion, giving GM 7 percent of PSA that was later sold following the dissolution of a planned partnership in Iran.