France's $1.3bn spend to ensure rights at Renault
The French state will spend as much as €1.23bn to raise its stake in Renault and maintain its influence in the carmaker.
The French treasury bought 9.6m Renault shares on the market and has given a bank a mandate to acquire 4.4m more, the Industry Ministry said. The move will cost between €814m and €1.23bn and safeguard extra voting rights the government and other long-term shareholders are due to receive.
The government wants to ensure it wins a shareholder vote on April 30 that will determine whether any investor who owns the stock for more than two years can get double voting rights. The state backs the shift, allowed in French law since 2014, which will give it and other long-term shareholders more power.
France is the biggest owner of stock in Renault, followed by Japanese auto-manufacturing partner Nissan.
"This measure is aimed at protecting the current Renault-Nissan alliance structure against shareholder activism," said Philippe Houchois, a London-based auto analyst at UBS.
The state's holding will rise to 19.7pc of Renault and 23.2pc of its voting rights, from 15pc and 17.7pc before yesterday's purchases, ministry officials said on a conference call.
Because of its close ties to Renault, which is based in the Paris suburb of Boulougne-Billancourt, Nissan doesn't exercise its voting rights, leaving the government with the main influence at the French company.
A Renault spokesman declined to comment yester day.
"This operation conforms perfectly to the new doctrine of state shareholdings, which is that of active management of the portfolio," the Industry Ministry said. "Its aim is to protect the state's weight in the governance of the company."