David Einhorn, famous for short selling Lehman Bros. shares earlier this year, sent a letter to French bank Natixis on August 19 opposing the Company’s proposed €3.7bn rights issue. Click here to view the letter.
Instead of diluting the share base by around 50%, Einhorn’s
The share issue was unveiled after the bank suffered a €1.5 billion loss in the second quarter, mainly related to write-downs on structured products like CDOs, and needed additional capital to meet regulatory requirements. A research analyst from Oddo Securities in
On Friday, 28.08 the Natixis’ shareholders approved the share offering with an acceptance of nearly 90%. Banques Populaires and Caisses d'Epargne who each own 35% of Natixis’ shares secured the outcome of the vote in advance.
Even though the efforts of Einhorn and Royal Capital were deemed a failure, circular shareholdings have been criticized before and could prove to be the entrée needed for a wave of activism in European banks and other EU companies to come.