Peugeot Shares on Sale

French car company PSA Peugeot Citroen is putting its shares up for sale today at a major discount in a $1.3 billion rights issue to fund a venture with General Motors (NYSE:GM).

U.S. auto giant GM and Peugeot announced their partnership last week with the goal of saving $2 billion annually through pooling purchasing and research and new model development.

Peugot’s 42 percent discount is based on its closing stock price from Monday. But some analysts will argue that the sale is even steeper. Macquarie analyst Jens Schattner says, “If you compare with two weeks ago, when we were still at around 16 euros, this is a 50 percent discount.”

The French carmaker hopes the alliance will help it gain momentum in new markets as Europe’s car market flails. “This will allow us to accelerate our international expansion and our move into higher-end models faster than we would have been able to do on our own,” said Jean-Baptiste de Chatillon, Peugeot’s chief financial officer. De Chatillon also said the discount was within normal ranges for a rights issue lasting roughly two weeks.

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