PSA Board Holding To Dongfeng, French Government Stock-Sale Plan
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.
Pastor Glenn on Feb 07, 2014
Any car-guy who remembers being totally fascinated with Citroen DS's and ID's, is hopeful that this company can survive the current economic down-turn. Yet Peugeot / Citroen must also be realistic, which goes against the grain for the French, apparently. They have too many factories and too many employees in France. Economic reality is economic reality, hard and difficult and painful as that is. It sure would be nice to have big Citroens available in this country for one reason - the USA roads are crumbling so bad, we need the sublime suspension in order to keep ourselves from constantly going to a chiropractor..... Then again, with the perceived unreliability of French cars opined by friends of mine in the U.K., perhaps we don't need another "Land Rover" bottom feeder for the reliability index in this country.... It's not like the French have ever succeeded for long in selling cars in this country, no matter which company they represented...