Case study: Saint Gobain share issue in June 2009.

Case study: Saint Gobain share issue in June 2009.

Issue of 109.3m new shares, or 2 new for every 7 old, with pre-emptive subscription rights

Number of shares before the capital increase:

382.6m

Issue price:

€14

Eligibility date of new shares:

1 January 2009

Latest price:

€27.75

Issue proceeds (gross):

€1.5bn.

(a) Compare consolidated shareholders" equity (€14.3bn) with the amount of the capital increase, the amount of the latter to market capitalisation before the operation. What do you conclude?

(b) Calculate the real dilution entailed by the capital increase.

(c) Calculate the share that new shareholders will hold in the capital and the shareholders" equity of Saint Gobain.

(d) What is your conclusion?

 

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