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Lyonnais draws investors
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July 5, 1999: 10:00 a.m. ET
IPO 30 times oversubscribed by institutions; 3.4M individuals subscribe
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LONDON (CNNfn) - Credit Lyonnais' public stock offering exceeded expectations, with institutional investors oversubscribing the issue more than 30 times, French officials said Monday.
French Finance Minister Dominique Strauss-Kahn said that 3.4 million individual investors had subscribed for the Lyonnais issue, outstripping available supply by a three-to-one margin.
Lyonnais staff has until Wednesday to buy shares in the privatizing bank. The shares are set to begin preliminary trading on the Paris bourse Thursday.
Among the core group of partner-shareholders, the largest stake will go to rival and compatriot Crédit Agricole, which will hold a 10 percent stake.
The early success of the Lyonnais IPO represents a sharp reversal from the scenario just a few years back when the bankrupt bank - once France's largest financial institution -- submitted to a European Union bailout.
In return, Lyonnais agreed to a privatize in order to rid the institution of the mismanagement and over-expansion that brought about its current predicament.
Last week, the French government priced the individual investor portion of the bank's offering at 26.2 euros. The French state is selling a third of the bank to seven core shareholders at 27.3 euros a share. Both prices were at the top end of expectations. The pricing values Credit Lyonnais at around 48 billion francs ($7.5 billion).
A 42 percent stake has been earmarked for individual and institutional investors, with individuals offered just over 56 million shares and institutions offered 70 million.
Five percent of the new shares will go to bank staff, while the state will retain another 10 percent. Ten percent of the share are already in public hands in the form of non-voting investment certificates, which have served as a proxy for the new shares in the run-up to the new share launch.
Crédit Lyonnais investment certificates were down 2.66 percent at 34.40 euros in Paris Monday afternoon.
--from staff and wire reports
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Credit Lyonnais
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