French-based private equity group Paribas Affaires Industrielles (PAI) sold its remaining stake in construction company Eiffage, while shareholders including Goldman Sachs Capital Partners also sold holdings in French internet services company Iliad.
The Eiffage deal was awarded to HSBC CCF, JP Morgan and Cazenove, despite the fact that PAI is the private equity arm of the former Paribas and bankers had expected BNP Paribas to be the lead. PAI was selling 5.66m secondary shares in Eiffage, representing its final 19% stake in the company. The block of stock was equivalent to 65–70 days’ trading, and increases the free-float to more than 70%.
The deal was launched in the US on the evening of March 21, where there was some interest, according to a banker involved in the placement. The leads had gone out with guidance of €90.80–€91.50 off a close of €92.90. By London time the next morning, the deal was half covered, and quickly moved to oversubscription.
Pricing was set at €91.00, a 2% discount to the previous close, with proceeds of €515.1m. The stock opened on March 22 at €90.50, fractionally below the bottom of the range, although bankers said that this kind of correction was only to be expected.
But the trade was made more difficult by a sudden sharp drop in the stock later in the day.
The shares had traded at €91.00 or just below in early trading, then fell to €89.50 later in the morning, with the result that the deal was being allocated while the stock was at or below the offer price. Nevertheless, bankers said that none of the investors in the deal refused to take the stock, and the leads were not left with a long position.
By the end of trading on March 23, the stock had reached €89.00 and was up slightly at €89.90 in early trading the next day. Eiffage shares have risen by about 55% since the last ECM trade in the name, which was the sale of a 10% stake by PAI in March 2004, led by BNP Paribas.
The Iliad deal was a much smaller affair, involving the sale of a total of 2.14m shares at €27.50 to raise €58.85m. The selling shareholders were GS Capital Partners, which sold 936,660 shares, founder Xavier Niel, who sold 500,000 shares, and another employee who exercised options covering 699,320 shares.
The total deal was for 3.9% of the company. The sale reduced Niel’s stake from 68.5% to 67.6%, on which he is locked up for six months. Cazenove, which was a joint lead on the company’s IPO at the start of 2004, was sole bookrunner on the latest disposal. SG had book-run the IPO, which was priced at €16.30 and was 28 times covered.