French government-controlled bank divests Valeo stake image

The French public investment bank BPI decided it was time to relinquish its 1.7 percent holding it had in French auto parts supplier Valeo in a move that signals the end to a skirmish within the company’s stock with an activist investor from America.

BPI announced in a statement it obtained 188 million euros ($202.55 million) after it sold 1,322,142 Valeo shares at 142.26 euros each. The financial institution, controlled by the French government, had last year sold another portion of Valeo shares – 2.5 percent – after previously government-controlled units had acquired more than eight percent in Valeo’s capital back in 2009 to counter the implication of US hedge fund Pardus Capital. Immediately after the financial crash Valeo was under pressure from Pardus to make a strategy change and divest assets in the sector that was struggling to fend off a massive sales crash. Meanwhile, Pardus has also sold off all of its stake it had built, which amounted to around 20 percent of the Valeo stock.

BPI motivated its decision by saying the supplier was now confident it had a stable shareholder base and it managed to claim a top position among auto industry parts makers over the past five years, especially in the Asian region. BPI will retain 1.7 percent of Valeo’s stock after the sale, entitling the financial institution to claim 3.2 percent of the voting rights. CDC, a French state lender, also has a holding of 1.83 percent of Valeo’s capital and 3.44 percent of its voting rights, with the French government thus remaining the firm’s largest stakeholder.

Via Reuters