France Telecom Shrs Fall Again On Placement, Issue Worries
September 30, 1998
Dow Jones Newswires
PARIS -- Shares in French telecommunications group
France Telecom (FTE) are falling sharply for a third
consecutive day on the Paris stock exchange
Wednesday as many investors take profits amid the
uncertainty over terms of a forthcoming convertible bond
issue.
"The stock outperformed September's bearish market
so, added to the rumors surrounding the bond issue,
there is a strong incentive to take profit," said a trader at
Meeschaert-Rousselle brokerage house.
Dealers added selling orders originated mostly from
foreign investors.
The French government has yet to release details of its
planned sale of a 5.0% to 6.0% stake in the company, in
which it sold around a 23% interest a year ago. France
Telecom also hasn't detailed its planned rights issue by
which it will increase its capital by 5.0%.
Since the beginning of the year, France Telecom shares
have risen 55%, outperforming the CAC-40 index
benchmark, which has climbed only 11% during the
same period.
At 1445 GMT, the stock stood at FRF332.1, down
5.1%, or FRF17.9. The stock fell 1.9% Monday and
3.6% Tuesday.
Sources Tuesday said French banks Societe Generale
(F.SGF) and Paribas SA (F.PBS) would be the lead
managers for the launch of a France Telecom FRF12
billion convertible bond issue. The issue would be part of
a larger operation that will involve the sale of an
additional portion of the French government's stake.
While the government hasn't formally named the lead
managers and remains tight-lipped about its plans, the
French press has talked of unconfirmed rumors that new
bonds would include a conversion price of FRF350 a
share.
Christophe Prat, an analyst at Jacques Chahine Finance,
noted a valuation of France Telecom's shares based on
average earnings per shares forecasts came to about the
same FRF350 figure.
-David Gauthier-Villars; 33 (0) -5300-0303;
-dvillars@ap.org |
