(News Bulletin 247) – The investment company has launched an issue of 750 million euros of bonds exchangeable for Bureau Veritas shares, in which it holds 35.5% of the capital. This transaction comes a few days after Wendel’s presentation of its strategy.

Wendel uses a relatively simple way to finance itself via an investment in a company in its portfolio: hybrid debt. On Wednesday, the investment company launched an issue of bonds exchangeable for existing ordinary shares of the ICT specialist (tests, inspections, certifications) Bureau Veritas, in which Wendel holds 35.5% of the capital and 51.7% of the voting rights.

This issue concerns a total amount of 750 million euros and the bonds have a maturity of three years for an annual coupon of between 2.125% and 2.875%.

In the event that the bonds are exchanged in full at maturity, Wendel would retain a stake of approximately 30.6% of the capital and approximately 46.1% of the voting rights of Bureau Veritas, Wendel indicates.

The investment company intends to use the proceeds of the issue to finance its general needs while diversifying its sources of financing.

A new strategy

The timing of the operation is not trivial. The announcement of this financing comes a few days after Wendel presented both its financial results and the strategy of its chief executive, Laurent Mignon, who joined the group at the end of last year from BPCE. Wendel has thus announced that it wants to implement “more active management” of its portfolio, and intends to invest around 2 billion euros in the next two years in companies in Europe and North America.

The group had also decided to develop a new business, asset management for third parties, and had indicated that it would be “actively” involved in Bureau Veritas in order to “accelerate value creation”.

“Last week, we announced our intention to invest around 2 billion euros over the next two years, while optimizing Wendel’s financial flexibility. This operation allows us to maintain exposure to the rise in Bureau Veritas’ share price. , being convinced of its potential for appreciation. Wendel will continue to provide its active support to the Bureau Veritas management team with a view to continuing its value creation”, declared Laurent Mignon, quoted in the press release accompanying the announcement. of the operation on Wednesday.

Bureau Veritas shares fall

Bureau Veritas remains the largest of Wendel’s three listed holdings. At the end of December, its share of 35.5% represented just under 4 billion euros.

While the announcement of this hybrid financing had little impact on Wendel’s share price, which fell 0.6% around 9:50 a.m., Bureau Veritas shares fell 3.6%, accusing one of the biggest declines in the SBF 120.

Wendel’s financing uses existing Bureau Veritas shares and therefore does not create any dilution for the shareholders of the TIC group. But “the market considers that this may be the start of the reduction of Wendel’s stake in Bureau Veritas to a relatively low level, which may create an ‘overhang’ [une épée de Damoclès, une menace qui met sous pression une action, NDLR] on the stock for a while,” one analyst said.