Danone shares stumble as it announces a 3bn rights issue

FOOD group Danone yesterday said that it is planning a &euro;3bn (&pound;2.6bn) rights issue aimed at helping it snap up smaller rivals hurt by the financial crisis and aiding its growth through the downturn.<br /><br />The firm said it planned to launch a sale of new shares to existing shareholders in coming days, subject to internal and regulatory approvals.<br /><br />Danone, which is the world&rsquo;s biggest yoghurt maker, had net debt of &euro;11.26bn at the end of last year, bloated by its friendly 2007 purchase of Dutch food maker Numico for &euro;12.3bn. Some analysts were surprised by the size of the issue and cautioned the benefit of the move could be wiped out if minority shareholders in Spain sell their stock to Danone, provoking the shares to drop by 5.1 per cent to &euro;2.04 yesterday.