Lagardere to offer 7.9% mandatory exchangeables into EADS shares

By Kenneth Lim

Boston, April 5 - France's Lagardere SCA plans to offer 7.9% bonds mandatorily exchangeable through 2009 into shares of the European Aeronautic Defense and Space Co.

The bonds may be exchanged into 61 million EADS shares in three equal deliveries every June 25 starting 2007. The last delivery in 2009 will see Lagardere's EADS stake reduced to 7.5% from the current 15%.

The exchangeables are being offered in conjunction with a placement by Germany's DaimlerChrysler of 61 million shares. The reference price for the exchangeables issued by Lagardere will be the same as DaimlerChrysler's placement price.

IXIS Corporate and Investment Bank has subscribed for all the exchangeables and placed a large majority of the underlying shares to French institutional investors. JP Morgan and Morgan Stanley are placing DaimlerChrysler's shares as well as 12 million shares from Lagardere's offering.

Lagardere said in a statement that it will also receive the full benefit from any gains in the price of EADS shares up to a cap of 115% of the reference price. But Lagardere is guaranteed a sale at the reference price if EADS's stock price declines.

Paris-based Lagardere, a media giant whose brands include Elle magazine, said the offering will reduce its high-technology exposure and carry on its strategic refocusing on media activities.

EADS is a defense group owned by European interests, and its units include jet manufacturer Airbus.

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