July 12 (Bloomberg) -- PSA Peugeot Citroen, Europe’s second-biggest carmaker, rose to the highest level in more than a year on optimism the company may form an alliance and succeed in a turnaround.
Peugeot jumped as much as 5.6 percent to 7.98 euros, the highest intraday price since July 2012, and was up 4.4 percent at 11:24 a.m. in Paris trading. The stock has gained 31 percent in eight trading sessions. Volume was 82 percent of the three-month daily average. The stock set a 23-year low in 2012.
“The first-half sales weren’t so bad, and the company seems to be getting its cash burn under control,” said Sascha Gommel, an analyst at Commerzbank AG in Frankfurt. “There’s also an expectation that Peugeot will move to find a partner.”
The maker of the Peugeot 308 hatchback and Citroen DS models is struggling to return to profit as the European car market heads into a sixth consecutive year of contraction. Le Figaro today reported that France, which has a seat on Peugeot’s board, plans to hire an investment bank as an adviser, with Bank of America Merrill Lynch the leading contender.
The move shows Peugeot has started serious talks over an alliance, the French newspaper said.
Chief Executive Officer Philippe Varin is seeking to stabilize the company by the end of 2014 after the carmaker consumed 200 million euros ($261 million) a month last year. The strategy includes expanding sales outside Europe, eliminating 11,200 jobs in France by 2015 and shutting a factory near Paris.
Peugeot said on July 8 that first-half sales declined 9.8 percent, chiefly because of the end of deliveries of ready-to-assemble component kits to Iran. Excluding those products, Peugeot’s sales slipped 1.1 percent.
To contact the reporter on this story: Chris Reiter in Berlin at firstname.lastname@example.org
To contact the editor responsible for this story: Chad Thomas at email@example.com