Wendel to Raise 1 Billion Euros as Saint-Gobain Stake Cut

French investment firm Wendel SA (MF) will reduce its stake in Cie. de Saint-Gobain SA, Europe’s biggest building-materials supplier, to raise about 1 billion euros ($1.39 billion) and cut its construction industry holdings.

The 24 million Saint-Gobain (SGO) shares, or about 4.3 percent of the total, will be sold to institutional investors via Bank of America Corp.’s Merrill Lynch and JPMorgan Chase & Co., Wendel said yesterday in a statement. Wendel said it will have an “income statement loss” of about 100 million euros.

Wendel will hold about 12 percent of Saint-Gobain’s share capital and 20 percent of the voting rights after the sale. Those holdings will be pared to 11.5 percent of the equity and 19 percent of the voting rights following a planned dilution in the stock of Courbevoie, France-based Saint-Gobain.

“This level of ownership is durably compatible with Wendel’s investment strategy, focused on new non-listed investments diversified by geography and by sector,” Paris-based Wendel said. The firm said it plans to remain Saint-Gobain’s largest shareholder “for the long term.”

Saint-Gobain Chief Executive Officer Pierre-Andre de Chalendar has Wendel’s “full confidence,” according to the firm, which said it plans to vote for his renewal as director at the company’s June 5 annual meeting.

Proceeds from the sale will boost Wendel’s cash position of 547 million euros as of March 17 and create “appropriate leeway” to implement its investment plan and return to an investment-grade credit rating, the company said. Standard & Poor’s rates Wendel as BB+, the highest junk grade.

Saint-Gobain fell 1.1 percent to 43.67 euros yesterday in Paris, cutting its year-to-date gain to 9.2 percent. Wendel rose 0.2 percent to 107.95 euros.

To contact the reporter on this story: Frederic Tomesco in Montreal at tomesco@bloomberg.net

To contact the editors responsible for this story: Ed Dufner at edufner@bloomberg.net Andrea Snyder

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