Air Liquide SA is launching a 3.3 billion euro (US$3.7 billion) rights issue to help finance its takeover of Airgas Inc of the US, the French industrial gases supplier’s biggest-ever acquisition.
French shareholders are eligible to receive one new share for every eight they hold at a discounted price of 76 euros, the Paris-based company said in a statement yesterday.
The move is the second of a three-part plan to refinance a loan taken out in December last year in connection with the Airgas acquisition, after a 3 billion euro bond issue in June. Air Liquide plans to announce a US$4.5 billion paper issue this week, the company said.
“If you look at the average of the past month that represents a discount of 22.5 percent,” Air Liquide chief financial officer Fabienne Lecorvaisier said on a call with reporters, referring to the pricing of the rights issue. “It’s a substantial advantage granted to our existing shareholders to subscribe to this capital increase.”
Air Liquide, which counts refineries, soda bottlers and welders among its customers, completed the purchase of Airgas in May to gain a foothold in the US market, and overtake competitors Linde AG, Air Products & Chemicals Inc and Praxair Inc in North America.
The company sees US$300 million in anticipated one-time savings from integrating the purchase.
The takeover prompted Linde and Praxair to begin merger talks, although those discussions have now ended, according to statements from the companies on Monday.
Air Liquide shares gained 0.3 percent to 94.97 euros as of 9:08am in Paris, valuing the company at 32.8 billion euros.
The rights issue is open to the public in France only and is fully underwritten by a syndicate of banks, the company said.
The subscription period is to run from today to Sept. 28.
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