A few days ago, TTAC reported that PSA and Mitsubishi were looking to forge closer ties with either a cross holding format, like Renault-Nissan, or by PSA taking a 30-50 percent stake in Mitsubishi. According to Bloomberg, analysts like Oppenheim’s Jens Schattner are ruling out equity acquisitions, saying the two firms should concentrate more on co-operation. “Peugeot doesn’t have the liquidity to take a major Mitsubishi stake in cash” he says, and he’s not the only one splashing cold water on the hook-up. Eric-Alain Michelis, an analyst at Societe Generale adds that PSA may have to issue new shares to pay for that stake in Mitsubishi they want, which will not please the Peugeot family as it will dilute their holding. Otherwise, “raising the finance would not be a walk in the park,” he reminds. Were PSA to issue shares to cover €1 billion of the $3.7billion needed for a 50% stake in Mitsubishi Motors, it would reduce the Peugeot family’s investment to 25%. Quelle horror!
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