EssilorLuxottica has placed €5 billion worth of medium to long-term bonds with very low interest rates, meeting strong demand from investors. The proceeds are meant to enable the group to finance the planned acquisition of GrandVision and to refinance its debt.
The demand exceeded €13 billion, prompting the group to increase the size of the placement, which was initially set at €4 billion.
A first series of three-year bonds will bear a negative yield of 0.02 percent a year. Another series of five-and-a-half-year bonds will have a yield of 0.1250 percent. A group of eight-year bonds comes with a coupon of 0.375 percent and a group of bonds maturing in 12 years will yield 0.75 percent annually.
Moody's has given EssilorLuxottica an A2 rating, with a stable outlook. The company has an A rating with a stable outlook according to Standard & Poor's.
Separately, Essilux has offered up to 350,000 newly issued shares to the employees of its French units at a price of €109.63 each – a major discount from the current share price of around €140. They have been allowed to acquire the new shares through a corporate subscription fund known as FCPE and called “GR Essilor Relais 2019.” The subscription period was due to end on Dec. 13. The number of shares actually issued will be announced on Dec. 20.
In the meantime, the group released the results of a new international share ownership plan known as Boost 2019. It was subscribed with a rate of over 67 percent, and now more than 56,000 EssilorLuxottica employees around the world have a stake in the group.
In November, EssilorLuxottica introduced the first employee share ownership program for the combined group, extending it to 12,000 eligible Luxottica employees in Italy. Luxottica's Italian employees registered a subscription rate of 68 percent, above the group's 2019 average. The plan this year covered 73 countries against 43 last year, enabling nearly 70,000 employees to become shareholders of the group.
As of Nov. 30, EssilorLuxottica had 436,545,931 shares outstanding. Excluding treasury shares, the number of shares with voting rights is only 435,446,174. According to the group's by-laws, voting rights are capped at 31 percent for any shareholder. This applies notably to Delfin, the investment vehicle of Leonardo Del Vecchio, chairman of the group.
The share price has risen steadily since Dec. 4 and the stock market capitalization of the group currently stands at more than €61.1 billion.