Thomson shares rise on bid speculation

Shares in French consumer electronics and media services group Thomson continued to rise on Tuesday amid speculation that a consortium was putting together a US$6bn buyout bid for the business. Private equity investor Silver Lake Partners has been linked to a possible buyout.

Shares in the Paris listed group were up just under 1% at lunchtime on Tuesday, following a 5.6% rise on Monday. The shares had risen from a close of €15.32 on Friday March 24 to €16.33 per share at 1pm local time on Tuesday.

The latest share price rise comes in the wake of weekend newspaper reports that a consortium that would include a number of investment banks was preparing to launch a buyout attempt for Thomson.

A report in Thomson Financial’s PE Week has linked Silver Lake, a US private equity firm focused on large-scale private equity investments in technology companies, to the putative buyout group.

Silver Lake has been involved with Thomson SA since 2004, when it acquired junior subordinated bonds convertible into an 8.31% stake in the company for €407.95m (US$500m) in a privately negotiated transaction. In a concurrent deal, the board of Thomson SA authorised the repurchase of up to €400m (US$490m) of its own ordinary share capital.

Under the terms of the July 2004 deal, the bonds were convertible into ordinary shares at €17.50 per share, a premium of 14.2% to Thomson SA’s closing price on Friday, ahead of the recent speculation. At €17.50 per share, Thomson SA’s market capitalisation would stand at €4.8bn (US$5.76bn).

Donal O’Donovan