Saint-Gobain, the large French glass company, has announced that it wants to sell its 32.9 percent share in Essilor International in order to finance its growing diversification in the distribution of construction materials and in high-tech fields such as technical plastics and ceramics. The disposal of its shareholding, which is being coordinated with Essilor's management, would give Saint-Gobain a capital gain of about 580 million euros on its investment in the company, worth now almost 1 billion euros at current market prices.
Essilor's management will only say for the moment that it's actively researching various alternative ?partnership? solutions that would ensure the development of the company's numerous projects and a reinforcement of its world leadership in ophthalmic lenses. It's hard to imagine a ?partnership? with a competitor, considering the anti-trust implications, so Essilor's new major shareholder could be an institutional investor or perhaps a large company in contact lenses or eyewear frames.
More than half of Essilor's equity is trading publicly on the Paris Bourse, where its share value has had trouble breaking the e300 barrier, partly because investors have been favoring high-caps on a European scale and internet-related firms.
Saint-Gobain regards its own stake in Essilor is regarded as only a portfolio investment. Saint-Gobain first acquired a shareholding in Essilor 12 years ago, and then built it up gradually to 32.9 percent, just below the level that would have obliged it to make a tender offer for all the remaining shares, but its presence in Essilor's equity represented a shield against a possible hostile bid.