France raised €5.1 billion from the sale of shares in France Telecom as investors clamoured for stock in Europe's biggest placing in years, banking sources said today.
Robust investor demand for shares in the country's top telecoms operator - which just last year flirted with collapse under record debts - prompted the banks handling the sale to place an extra 31.5 million shares worth €600 million in an over-allotment option, or greenshoe.
The French government said it planned to sell up to 12.1 per cent of the former telecoms monopoly to help cut a trillion-euro mountain of national debt. The deal allows its stake to fall below the symbolically important 50 per cent level, to roughly 41 per cent.
"The greenshoe was placed with fund managers and, given the shares are trading well, we don't expect the stock to be bought back," a banking source close to the deal said.
Shares in a greenshoe option can be bought back by the investment banks if they feel it necessary to do so to stabilise the share price.
The banks handling the telecoms sale are also hanging onto another 31.5 million shares, which they can use to stabilise any volatility in the share price in the aftermath of the hefty placing.