ECONOMY

Dexia unveils financing scheme to help fund Turkish bank acquisition

BRUSSELS/LONDON (Reuters) – Franco-Belgian financial services group Dexia unveiled terms of a share issue yesterday which will partly fund its acquisition of Turkish bank DenizBank. Dexia said it raised 1.2 billion euros ($1.54 billion), higher than initial estimates of about 1 billion euros, through a sale of 62.2 million shares priced at 19.30 euros each. Credit Suisse, Dexia Bank, JP Morgan and Goldman Sachs are joint bookrunners for the issue. By late afternoon, Dexia’s Paris-listed shares were down 2.5 percent at 19.40 euros, the leading loser in the CAC 40 index. More than 7 million shares had traded, about six times the daily average volumes traded over the past 30 days. News of the share placing in Dexia came a day after the group beat market forecasts with a 15 percent rise in second-quarter net profit, boosted by its financing division. Analysts said they were surprised Dexia had done the share offering yesterday as it had been silent on the topic during a conference call after its second-quarter results on Tuesday, but they said it was taking advantage of a share price rise. «The company just wanted to profit from the recent pickup in Dexia shares,» wrote Degroof analyst Ivan Lathouders in a research note. Analysts said the issue price was in line with expectations. Dexia had previously said it would also issue hybrid securities for about 500 million euros to fund the acquisition of DenizBank, which it bought earlier this year for $2.44 billion after an intense bidding war.