The strategic stake taken in Valeo by the French state-run investment fund, FSI, was taken to protect it from aggressive investment funds, the French president Nicolas Sarkozy has said.
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FSI is a state-run enterprise launched in October last year by President Sarkozy. It was set up to bolster France’s industry and protect it from foreign takeovers.
This week FSI took a 2.35% stake in Valeo for EUR19m. The acquisition, made on the open market, brings the French state’s total shareholding in Valeo to 8.33%.
President Sarkozy made the comments at a visit to a car parts factory on Thursday. He was quoted by local press as saying he had asked FSI to make the purchase “so that it (Valeo) would not be left facing an aggressive investment fund”.
He added that the current low share prices left companies such as Valeo at risk.
The New York-based Pardus already owns 19.75% of Valeo and has been in a power struggle with the Valeo management since it acquired its stake.
Earlier this month, Valeo posted a bigger than expected full-year net loss and a 9% sales drop, scrapped its 2008 dividend and said it did not see the car industry crisis ending before 2011.
The group said it faced a “generalised collapse in its markets in the fourth quarter”, with sales falling 26.6% thanks to plunging car sales.
