DNFGY Dongfeng Motor Group Company Ltd (PK)

PSA Peugeot Citroen's (UG.FR, PEUGY) board has approved a plan for an alliance with Dongfeng (0489.HK, DNFGY) in which the Chinese carmaker and the French state would buy large minority stakes at a 40% percent discount to Peugeot's current share price, Reuters said, citing an anonymous source.

The board agreed to enter final negotiations on a 3.5 billion euro ($4.8 billion) share issue that would see France and Dongfeng Motor Group take matching 20% percent holdings, the source told Reuters.

The capital increase would be priced at below EUR7 a share, and perhaps as low as a EUR6.85 indicative offer from Dongfeng, the source told Reuters. Peugeot's shares closed at EUR11.50 on Wednesday, down EUR0.11.

Website: uk.reuters.com

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