August 7, 2019 / 12:11 PM / 13 days ago

PSA shares spike on report Dongfeng exploring options for stake

A PSA Group logo is seen behind a car displayed during French carmaker's news conference as they announce the company's 2018 results at their headquarters in Rueil-Malmaison, near Paris, France, February 26, 2019. REUTERS/Christian Hartmann/Files

MILAN/PARIS (Reuters) - PSA’s shares briefly rose as much as 6.6% on Wednesday and trading volumes spiked after a Bloomberg report said Dongfeng Motor Corp is exploring options for its 2.2 billion-euro ($2.5 billion) stake in the French carmaker.

The report, which was cited by traders as the reason for the brief jump in PSA’s shares, said a full or partial sale was being considered.

PSA “does not comment on rumours”, the company said in a statement sent to Reuters.

The French carmaker’s board has not received any notification or signal that Dongfeng planned to reduce its stake, a source close to the company said.

The surge in PSA’s shares was short-lived.

By 1205 GMT, the stock was up just 0.6 % at 20.08 euros, lagging the benchmark Paris CAC-40 equity index which was up by around 1%.

($1 = 0.8932 euros)

Reporting by Danilo Masoni in Milan, Sudip Kar-Gupta and Laurence Frost in Paris; Editing by Josephine Mason

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