PARIS: PSA Peugeot Citroen is to raise one billion euros through a rights issue as part of a deal to allow US auto giant General Motors to take a stake in the group, the Wall Street Journal reported on Tuesday.
The daily cited a source familiar with the talks who said that the Peugeot family, which controls 30.3 percent of the capital and 45.75 percent of voting rights in the firm, intended to take part in the share sale.
French business daily Les Echos reported earlier on Tuesday that General Motors was in talks to obtain an interest of five percent in PSA Peugeot Citroen, France's largest car manufacturer.
The paper cited sources close to the negotiation as saying the deal was a so-called standstill agreement in which GM could not increase its stake in Peugeot without prior permission from the car group.
Other reports have said GM's stake could be up to seven percent.
Last week French Labour Minister Xavier Bertrand revealed that GM and Peugeot were in talks towards a strategic partnership, confirming a report on a website.
Contacted by AFP, Peugeot refused all comment.
Peugeot is France's top car manufacturer, ahead of Renault, and Europe's second, behind Volkswagen of Germany.
Last year, the firm, which employs 205,000 people worldwide, sold 3.5 million cars around the world, two-thirds of them in Europe where the market is under pressure as the economy slows sharply.
Peugeot shares stabilised Tuesday afternoon after jumping eight percent in the morning to 15.32 euros.
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