France set to privatise Rhone Poulenc

RHONE POULENC, the chemicals and pharmaceuticals group, is to be the next sale in the French government's privatisation programme. It is expected to be followed by Elf Aquitaine, the oil company, writes Peter Rodgers.

The Rhone Poulenc announcement by Edmond Alphandery, the economics minister, came as shares in Banque Nationale de Paris reached a 19 per cent premium to the Fr240 ( pounds 28.60) offer price during the first day of trading since their privatisation.

After an initial suspension because they had broken their upward limits, the BNP shares hit a high during the day of Fr285.90.

This confirms widespread expectations, based on the non-voting shares that were already traded, that the shares would show an instant paper profit for investors.

Brokers said there was strong demand from institutions that had had their allocations scaled back because of high demand from private investors. Institutions were warned in advance that if the private offer was popular they would have their allocations cut. They were five times oversubscribed.

Shares in Elf and Rhone Poulenc, which are already traded on the Bourse, rose as a result of the announcement of the new privatisations.

But they are expected to be routine sales compared with the next large-scale privatisation of the insurance company Union des Assurances de Paris, which is likely to take place next spring.