1987 - Year of the shrinking market?
Peugeot treasurer John Lindon faces a dilemma: should he come to the Euromarket with a rights issue before the privatisations of Saint Gobain, Paribas and AGF, when he can take advantage of a liquid market, or later when investors have fully appreciated the company's first-half 1987 performance?
The timing will be crucial. "Our financial advisers have been telling us to go sooner rather than later,' he said. "It's obvious that there's going to be less liquidity at the end of the first half next year.'
But Lindon feels that Peugeot should avoid jumping the gun: "We'll be taking a risk by waiting, but we've been premature with other issues.' So, "any issue in 1987 probably won't be done before summer', he said. "We'd like people to take account of Peugeot's recovery in the first-half figures.'
How much might be involved in the issue is unknown; the last two were each about Ffr1 billion.
For the investor, Peugeot looks like a good bet. James Gallagher of Societe Generale London, one of the big dealers in French blue-chip companies, is advising his clients to hold and encouraging the more aggressive to get in deeper.