Société Générale SA Announces €4.8 Billion Rights Offering To Repurchase Securities Issued To French Government

On Tuesday, Société Générale SA (SocGen) announced a €4.8 billion ($7.02 billion) rights offering. The proceeds of the rights offering will be used to repurchase €3.4 billion of securities, consisting of €1.7 billion in preference shares and €1.7 billion of hybrid debt, issued to the French government earlier this year, as well as to "increase the level and reinforce the quality of the Group's solvency ratios," and "allow for selective acquisitions." In the rights offering, each SocGen shareholder will receive one preferential subscription right per share of SocGen held at the closing of trading on October 7, entitling a holder of 9 rights to subscribe for 2 new SocGen shares, at a subscription price of €36 per new share (resulting in the issuance of 134,510,230 new shares).

The SocGen rights offering comes a week after BNP Paribas SA (BNP) announced a similar €4.3 billion ($6.28 billion) rights offering to help fund the repurchase of €5.1 billion of non-voting shares acquired by the French government. SocGen reiterated its commitment to continue to "finance and support the economy" and to apply the London Summit G20 guidelines "notably with regards to compensation policy."

In its communications to shareholders with respect to the rights offering, SocGen further announced that it had entered talks with Dexia SA to buy the Belgian-French financial services group’s 20% stake in Credit du Nord, aiming to boost SocGen's retail banking business.