PARIS/NEW YORK: Alstom said yesterday it was not informed of any potential public tender offer for its shares, which opened 17 percent higher after Bloomberg reported that General Electric was in talks to buy the French turbine and train maker for about $13bn.
The companies may announce the deal as early as next week, Bloomberg cited people with knowledge of the matter as saying.
The report said the deal would give GE control of Alstom’s high-speed TGV trains and rail-signal technology and that the move had the support of Bouygues, Alstom’s biggest shareholder with a 29 percent stake. “In response to recent speculation in the economic press, Alstom is not informed of any potential public tender offer for the shares of the Company,” Alstom said in a statement.
“The Group constantly reviews the strategic options of its businesses,” it said, adding it would use give an update on its prospects on May 7, when it releases its annual results.
A spokesman for Bouygues did not respond to phone messages requesting comment. A GE spokesman declined to comment.
Alstom shares have slumped 20 percent in the past 12 months on concerns over its cash flow, prompting Bouygues to take a $1.9bn writedown on its stake in February. Alstom has been hit hard by a drop in orders for power equipment from utilities, which in turn are suffering from weak electricity prices.
The group, which now has a market capitalisation of about $10.37bn, announced 1,300 job cuts last year and put assets up for sale to raise cash, including a stake in its transport business, which makes France’s prized high-speed TGV trains.
If confirmed, a takeover offer from a foreign company would raise eyebrows among politicians and unions in France, where Alstom employs around 18,000 staff, or 20 percent of its global workforce.
The group was bailed out by the French state a decade ago and has strongly relied on orders from national rail operator SNCF and utility EDF.
No one could immediately be reached for comment at the office of Arnaud Montebourg, France’s Economy Minister in the freshly reshuffled Socialist government.
Firebrand Montebourg last year intervened to prevent Yahoo from taking over French online video-sharing site Dailymotion from historic telecoms operator Orange.Reuters
