Eurazeo cashes in on early Danone exit

Greg Gille
@unquotenews
25 April 2013

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French listed private equity player Eurazeo will part ways with dairy products giant Danone as €700m's worth of exchangeable Danone bonds, issued in 2009, are set to be converted to equity.

Eurazeo issued 15,469,613 bonds exchangeable for Danone shares in June 2009, for a total consideration of €700m. The bonds were due to mature in June 2014.

Eurazeo stated it received early conversion requests from bondholders over the past few days, covering the vast majority of the bonds – a move sparked by the recent upitck in Danone's share price. The French GP will exercise its early redemption option for the bonds on which conversion has not been requested.

On top of seeing the €700m debt wiped out, Eurazeo will also benefit from the elimination of the corresponding interest expense for 2013 and 2014, amounting to €43.8m on a full-year basis. Eurazeo will also receive €4.8m's worth of dividends in 2013 from the 2012 fiscal year. Overall, Eurazeo expects the early redemption to generate €131m in consolidated net income.

The GP has a long history with Danone, being a shareholder of the company for more than 25 years – the dairy group saw its turnover increase from €5.7bn to nearly €20bn during that time.