(Released Yesterday) - full article attached
Vallourec [EPA:VK], the French tubing services company, is understood to have become 'very vulnerable' to a potential takeover as its market capitalisation fell to EUR 1.3bn today (October 21), compared with EUR 11bn in previous years, French newsletter WanSquare reported.
The unsourced report said the French government and 'private' parties are monitoring the situation. Several investment banks are working on numerous scenarios, including a recapitalisation from existing shareholders Nippon Steel [TYO:5401], the Japan-based steel company, and Bpifrance, the French sovereign fund, which control 1.3% and 5.3% of Vallourec, respectively, the report added.
The report claimed that a potential takeover could become urgent given the situation of the market that Vallourec is operating in and potential interest from foreign buyers.
The report noted, however, that a reserve capital increase would require a large round of share issuance, which would dilute existing shareholders' stakes and be at a lower price than the current share price, which is currently down 57% compared with the beginning of 2015.
Vallourec employees hold 7.61% of the company and paid much more than current market prices for their shareholdings, the report went on to say.
WanSquare