French insurer AXA SA launched a rights offer to raise 2 billion euros (1.79 billion pounds) to part fund growth plans, the company said in a statement on Monday. The new shares are being offered at 11.90 euros and the deal will result in the issue of a minimum 174.11 million new shares, the statement emailed to Reuters said.
The Euro 2 billion share capital issue will be carried out through preferential subscription rights for AXA’s existing shareholders.
The insurer is planning the capital raising to fund potential acquisitions, the paper said. Bankers at BNP Paribas and HSBC have been appointed to work on the capital raising, it reported.
An Axa spokesman in the UK, contacted by Reuters, referred enquiries about the story to a Paris-based company spokesman, who could not immediately be reached for comment.
The move follows assurances by Axa that the company did not need to tap shareholders for money, the newspaper said. Axa is likely to explain that the denials related to questions over Axa’s financial strength rather than funding growth opportunities, the paper added.
A source close to AXA said the final go-ahead was subject to board approval and that there was a small chance that it could be cancelled, the Telegraph reported.
This rights issue will be used to seize future acquisition opportunities, primarily in high growth markets, including the potential buyout of minority interests in Central and Eastern Europe and the transaction proposed to AXA Asia Pacific Holdings’ Board, while maintaining a strong balance sheet.
The settlement and listing of the new shares are expected to take place on December 4, 2009.
AXA Assurances IARD Mutuelle and AXA Assurances Vie Mutuelle (the “AXA Mutuelles”), which hold together 14.29% of AXA’s share capital, have undertaken to participate in the capital increase by exercising all of the preferential subscription rights attached to their shares.
BNP Paribas and Schneider Electric, which hold, directly or indirectly, respectively 5.36% and 0.47% of AXA’s share capital, have indicated their intention to participate in the capital increase by exercising all of the preferential subscription rights attached to their shares.
The remainder of the issue has been underwritten by a syndicate of banks.