February’s Euro Disney share price spike to be investigated by French authorities

Monday, 14th March 2011 at 12:17

DLRP Today received several emails last month questioning why Euro Disney SCA’s share price had suddenly rocketed from €4.39 to as high as €9.05, its highest price since June 2008, in just the space of around 10 days. And it seems us Disneyland Paris fans weren’t the only ones to think it just a little odd. As The Telegraph reports, the sudden price spike will now be investigated by France’s stock exchange watchdog, the Financial Markets Authority (Autorité des Marchés Financiers). Christian Sylt writes, “Its share price jumped 17pc on the positive first quarter results and, defying expectations, continued to climb with the trading volume following suit. In one session 13pc of the company changed hands, which led to speculation of a takeover or that the shares would be delisted and bought back by the Walt Disney Company. Both suggestions seem to be wrong.”

The Telegraph cites a source close to the investigation as suggesting it has raised suspicions of “classic market abuse”. “The volumes traded reached more than 50 times normal levels on some days last month and this led to the AMF putting the share under watch. According to the source, it was then put under investigation earlier this week ‘in order to see what is going on’. A spokesman for the AMF declined to comment, and one Paris-based analyst said: ‘I don’t know why the shares have gone up and the company doesn’t know either.'” Euro Disney SCA, the operating company behind Disneyland Paris, is 39.8% owned by The Walt Disney Company and 10% by Saudi billionaire Prince Alwaleed with the remaining 50.2% shares publicly traded on the Paris Euronext stock exchange.

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Comments

  • About Time.

  • I really want to know what’s going on behind the scenes.
    ED SCA isn’t very interesting for other companies, because of the legal construction of ED SCA, TWDC will always have the last word. ED SCA is only the holding company and if I’m not mistaken the most important company is Euro Disney Associes SCA.

    I think I read somewhere that TWDC itself can only buy the 10% of shares that Prince Alwaleed holds, because TWDC is not allowed to hold more than 50%. But I may be wrong on that. And I also can’t imagine that TWDC is going to reduce its stake in ED SCA.
    So maybe it is really because of the good numbers, although I doubt it, because ED SCA had already better years and nothing happened with the stake.

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