Michelin today launched the $1.6bn capital raising to finance expansion in emerging markets, enhance the
company’s credit rating and reinforce the company’s financial flexibility.
The subscription price of the new shares was set at €45 – a 27 percent discount to Monday’s closing price. Shareholders are entitled to two new shares for every 11 shares currently held. The subscription period ran from September 30 to October 13 and the new shares will begin trading on October 25, after World Finance goes to press.
Citigroup will be the sole non-French lead bank on the deal, according to data provider Dealogic. BNP Paribas and Crédit Agricole are the two other lead banks, having both led Michelin’s last ECM deal in 2007 – a $918m convertible bond. In Crédit Agricole’s case, it was through Calyon, the former name of its investment banking division.
The role is a significant boost for Citigroup, and represents one of its biggest mandate wins for the year to date. The bank was a bookrunner on the $5.7bn Volkswagen follow-on which priced April 14, and the $2.1bn Bank of Ireland follow on, which priced on June 9.
The Michelin deal is likely to be Citigroup’s joint-third biggest ECM deal, along with the $1.6bn follow-on for Norsky Hydro, which was priced on July 13.
The bank is ranked eighth in the ECM bookrunner rankings in Europe, the Middle East and Africa, with a 3.8 percent market share. The US bank ranked 10th in 2009 with a 3.9 percent market share.
While the bank has lost a number of senior investment bankers over the last 18 months, the ECM team has remained relatively stable. In July, the bank added John Millar, the well-respected former head of ECM syndicate at Merrill Lynch, as a managing director reporting to Tim Harvey-Samuel, head of ECM in Europe, the Middle East and Africa.
James Bardrick and Manuel Falco, who took over as co-heads of banking for Europe, the Middle East and Africa in October following the departure of Tom King to Barclays Capital last year, are finalising a new structure for the European business after putting in place a new strategy for the firm.
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