French media group Lagardere has sold its 7.4 percent stake in Airbus parent EADS, kicking off a long-expected overhaul in the ownership of Europe’s top aircraft maker.
Lagardere raised 2.3 billion euros ($3 billion) through the sale, with EADS spending 500 million euros to buy 1.6 percent of its own shares – a buyback below some analysts’ expectations.
Societe Generale, the global coordinator and bookrunner of the sale along with Bank of America-Merrill Lynch, said 61.1 million EADS shares were placed at 37.35 euros apiece, Reuters reports.
The price achieved through the accelerated bookbuilding sales process was at the bottom of the initial range of 37.35-37.95 euros, according to traders, and was at a 3.5 percent discount to Monday’s closing price of 38.71 euros.
EADS’s share price slid more than 4 percent in early trading on Tuesday before recovering some ground to trade down 2.8 percent at 37.62 euros by 1012 GMT.
“Many investors we spoke to believed EADS would acquire 1 billion to 1.5 billion euros of the stock being placed by Lagardere,” JPMorgan Cazenove analysts said in a research note.
“It is unclear why EADS is not taking a bigger share of this placing but it is possible that EADS is prioritizing increasing its free float over the accretion of a buyback.”
EADS may also want to “retain buyback ‘firepower’ to support its share price over the next 18 months,” the analysts added.
Lagardere shares were down about 1 percent.
The owner of book publisher Hachette and magazines like Elle and Paris Match has said it plans to use the proceeds mostly to pay down debt and return cash to shareholders, likely via a special dividend.
Lagardere’s exit from EADS will be followed by the withdrawal of German carmaker Daimler, paving the way for the aerospace group to have a larger free-market float with combined government stakes capped at 28 percent.
Lagardere, which had initially said it would sell the EADS stake by July 31, announced late on Monday that it had mandated Bank of America-Merrill Lynch and Societe Generale to manage the sale.