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By Geraldine Amiel
PARIS--The French government announced Tuesday the sale of a
3.1% stake in energy group GDF Suez SA, with an option to sell as
much as 3.6%, as part of an effort to raise cash and help pay for a
controlling stake in engineering giant Alstom SA.
"The proceeds of the sale could be used to finance the entry of
the state into Alstom's capital equity, as announced by the economy
minister," Arnaud Montebourg, the French finance and economy
ministries said in a joint statement.
The government plans to acquire a 20% stake in Alstom to gain
more control over the company's strategy, as it is to merge its
energy business with that of General Electric Co. The government
initially opposed a deal with GE but signed off after the U.S.
group made a series of concessions.
Entering Alstom's capital as its largest shareholder was one of
the conditions to clear the way for the long-awaited deal.
The government thus entered a weekend of intense negotiations
with Alstom's current largest shareholder Bouygues SA to acquire
that stake, arguing over the price. The government was intent to
pay 28 euros a share while Bouygues, which is seeking to raise cash
to finance a restructuring at its telecom unit, wants a significant
premium.
A deal was finally reached Monday through which Bouygues will
lend the voting rights related to a 20% stake in Alstom, over 20
months, granting an option to the government to buy the shares
during the period, either directly from the French conglomerate or
on the market.
Mr. Montebourg said over the weekend that the government could
pay for the stake with the proceeds from the sales of stakes in
companies such as Aeroports de Paris SA, Airbus Group NV and Safran
SA, yet never mentioned other companies such as GDF Suez SA in
which the French state owns shares. The minister also said then
that the state has EUR2.7 billion in its coffers.
Based on Tuesday's closing price at the Paris Stock Exchange,
the sale of the GDF Suez stake could raise between EUR1.56 billion
and EUR1.79 billion ($2.12 billion to $2.43 billion), according to
Wall Street Journal calculations.
The sale will be conducted through accelerated institutional
booking.
On Saturday, Alstom's board said it had officially accepted GE's
sweetened offer for its power-equipment unit. The U.S. company on
Friday changed its $17 billion initial offer for the whole of
Alstom's power business to make it more palatable to the French
government, which has been reluctant to let the industrial jewel
fall into U.S. hands and potentially threaten French jobs.
Alstom would sell its gas-turbine business, the largest part of
the power-equipment unit, to the U.S. company and house the French
part of its steam and nuclear turbines, renewable-energy activities
and grid equipment in 50-50 joint ventures with GE.
Write to Geraldine Amiel at geraldine.amiel@wsj.com
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