PARIS, 21 Jan. 94 (OPECNA) -- The sale of France's largest industrial group and the world's ninth-largest oil company kicked off Thursday with the opening of pre-placement orders for 60 million shares of stock.
The French government is offering 23.25 per cent of the Societe Nationale Elf Aquitaine for public sale in one block, with the remainder of the state's 50.8 per cent stake in the company to be split among the state, institutional investors and current certificate holders in the state holding company Erap.
Elf President Philippe Jaffre told a press conference he saw the group's privatization as giving Elf more flexibility and the financial means to pursue its ambition of becoming a dominant player in the oil, health and chemicals sectors.
The share sale price will not be announced until the sale proper is launched within the next two weeks by the French Economy Minister Edmond Alphandery.
But Elf's own figures estimating the state's net income from the sale of Elf stock puts the per-share value at 400 French francs, about $67.85 at current exchange rates.
Industry analysts expect the government's privatization committee to value the stock at about 380 french francs, or $64.46. Elf stock traded actively Thursday at between 416 francs and 420 francs.
Elf put the total value of the 60 million shares up for sale at about $4 billion.
With nearly half of Elf's capital already traded on major stock exchanges, the state opted to put only a little less than one-fourth on the market for private and institutional investors.
It has reserved a 13 per cent share for itself and a so-called 'golden share' which will give it veto power over any shareholders whose interests break the ceiling of 10, 20 or 33.3 per cent.
Similarly, the golden share will permit the state to have a say in any decision affecting assets held by the oil and gas subsidiaries Elf Aquitaine production, Elf Antar France, Elf Congo SA and Elf Gabon SA, which represent a majority of Elf's activities.
Individual investors with priority reserved for European citizens will be offered a total of 33 million shares, equal to more than 10 per cent of Elf's capital, Alphandery announced.
An additional 10 per cent is earmarked for institutional investors whose offers will be accepted through next Monday, as part of a bookbuilding process. The price will vary in a band slightly above the public price.
Press reports here have revealed disappointment among Elf and government officials at the lacklustre response of major international groups to become part of the so-called 'hard core' of Elf investors.
So far, only French insurance companies UAP and AXA and French banks BNP, Paribas and Suez have agreed to buy between 1 and 2 per cent of the group's capital.
On the industrial side, Eenault, the French carmaker, is believed interested in a 2 per cent stake but efforts to interest international oil have not borne fruit.
The Italian Agip and the Kuwait Petroleum Corp. both were approached to take a stake in Elf, but neither group has reportedly agreed despite the KPC's decision to take a similar stake in the French bank BNP last fall.
Only the Belgian oil concern Petrofina, through the Bruxelles Lambert holding of Albert Frere, is likely to take a major stake in Elf, which itself owns 4.9 per cent of Petrofina.
The remaining 2.5 per cent of Elf's capital will be disbursed in exchange for existing certificates in Erap, plus free shares for every 10 shares bought by European citizens and preferential conditions offered to Elf employees.
