PARIS — The French industrial group Alstom announced late Wednesday that it plans to stage a 3.2-billion-euro ($3.48 billion) share buyout following the sale of its energy assets to General Electric.
Under the offer, 91.5 million shares, amounting to 29.5% of capital, will be repurchased at 35 euros ($38.09) apiece and then canceled under a strategy to refocus the company, it said in a statement.
The offer price is a 17.6% premium over Tuesday’s market close, and 21.8% higher than the weighted average for the previous month, it said.
Bouygues, which currently owns around 29.2% of Alstom’s capital, will add a number of shares to the proposal so that its current stake is maintained at a similar level, Alstom said.
On Monday, GE said it had finalized a 9.7 billion euro ($10.56 billion) deal to acquire the energy assets of the French engineering group, best known as the maker of the high-speed TGV train. The agreement includes the cost of creating three new joint ventures covering renewable energy, electricity grids and nuclear power.
The deal’s closure comes after it received approval in over 20 countries and regions, including the European Union, United States, China, India, Japan and Brazil.
GE also announced that it had sold a rail signaling business to Alstom for $800 million — part of GE’s efforts to focus more directly on its energy portfolio. Alstom will now focus on railway transport.
After the GE deal and the buyback, Alstom’s capitalization will fall from 9.2 billion ($10 billion) to 6 billion euros ($6.52 billion), on the basis of Tuesday’s closing price, be debt-free, and have a “strong balance sheet” to pursue a strategy of growth, the company said.
According to first-half results for April through September released Thursday, the company said it notched 3.9 billion euros ($4.24 billion) worth of orders, up 8% overall and up 4% organically from the previous year when the company had sales of 6.2 billion euros ($6.74 billion) and booked 10 billion euros ($10.87 billion) of orders in the 2014-15 fiscal year.
Alstom chairman and CEO Patrick Kron denied persistent rumors of a potential merger with Canada’s Bombardier.
“We are concentrated on organic growth and will only be interested in acquisitions if that allows us to reinforce our strategy and development,” he said.
Copyright Agence France-Presse, 2015