Bouygues shares soar on French market

26th July 2004, Comments 0 comments

PARIS, July 26 (AFP) - Shares in French telecommunications and construction group Bouygues gained sharply Monday as the market applauded news of a special dividend and confirmation to sell some or all of its Saur unit, dealers said.

PARIS, July 26 (AFP) - Shares in French telecommunications and construction group Bouygues gained sharply Monday as the market applauded news of a special dividend and confirmation to sell some or all of its Saur unit, dealers said.

In response, the US investment bank and brokerage Merrill Lynch upgraded its rating on Bouygues to 'buy' from 'neutral', noting that an announced payment to shareholders of EUR 1.7 billion (USD 2.06 billion) was equivalent to 19 percent of Bouygues' market capitalisation.

In afternoon trading, Bouygues shares were up 5.87 percent at EUR 27.59, while the CAC-40 index was off 3.82 points at 3,575.65 points.

Bouygues said last Friday it would propose an exceptional payout to shareholders of EUR five per share "in view of the favourable outlook for the group", costing a total of EUR 1.7 billion.

It also announced after the market closes that it planned to sell some or all of its water, energy and environmental services unit Saur due to its increasing focus on telecoms and media interests.

"This makes strategic sense as the unit is not part of the company's core assets," the Paris analyst said.

Merrill Lynch agreed: "The sale of Saur would allow the group to focus on its faster growing assets. It (also) has the potential to raise up to EUR one billion in cash, which can be used to pay down debt or potentially increase shareholder returns in the future."

© AFP

Subject: French news

0 Comments To This Article