BNP goes shopping at Galeries Lafayette

29th March 2005, Comments 0 comments

PARIS, March 29 (AFP) - French bank BNP Paribas and a founding family shareholder in Galeries Lafayette, a leading French store group, have teamed up to bid for the retailer, the two companies said on Tuesday.

PARIS, March 29 (AFP) - French bank BNP Paribas and a founding family shareholder in Galeries Lafayette, a leading French store group, have teamed up to bid for the retailer, the two companies said on Tuesday.

The offer, following a sale of nearly 30.0 percent to BNP by a second founding family, is to be launched at EUR 235 per share three months after a rival bank had built up a stake in the business.

Shares in Galeries Lafayette had been priced at EUR 230.80 each at the close of trading on Thursday.

Galeries Lafayette, a landmark of Paris retailing, was founded 100 years ago by the Moulin and Meyer families. It operates big stores, smaller stores under the Monoprix name, and is a leading provider of consumer credit.

The Meyers had sold their holding to the bank with the agreement of the Moulin family, and the supervisory board of the retailer, meeting on Monday, had unanimously welcomed the "agreed and friendly" plan, the statement said.

The statement said: "The offer will be financed by BNP Paribas." If the bid is fully successful, the bank would have invested EUR 585 million for its resulting interest of 38.0 percent.

The statement, alluding to the purchase of stock by another bank at the end of last year, said that the objective was to stabilise shareholdings and strengthen the group's prospects while also developing consumer credit activities.

The bid is to be made through by SEMAD, a holding company for the Moulin family with a majority interest, and BNP Paribas.

If the plan succeeds, the Moulin family would end up with about 62.0 percent of the business and BNP Paribas with 38.0 percent, they said.

The Meyer family had sold its interest of 29.5 percent to BNP Paribas, the store and the bank said in a joint statement.

In December, the Credit Mutuel bank acquired more than 15.0 percent of the stock in the retailer. The managers of Galeries Lafayette regarded this as a hostile move.

For the Moulin family, the alliance with the bank offers opportunities to strengthen the business. The two joint presidents of the store, Philippe Houze and Philippe Lemoine are members of the Moulin family.

The agreement also allows for BNP Paribas to increase its interest in Cofinoga, the store's credit arm, to 50.0 percent from 49.0 percent. Until now Galeries Lafayette has owned 51.0 percent of this subsidiary.

Cofinoga, which is the third-biggest French consumer credit lender, is to develop a close association with Cetelem, the consumer credit arm of BNP Paribas.

© AFP

Subject: French News

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