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Alstom shares up on GE takeover bid

Article By: ,  Financial Analyst
April 30, 2014 10:15 AM

The share price of French company Alstom has shot up this morning (April 30th) following the news General Electric (GE) has made an offer for its energy business.

Alstom stated that it is considering a $16.9 billion (£10 billion) offer for the business, but it also open to a rival bid coming in from German firm Siemens.

GE's chief executive Jeff Immelt revealed that he has had a "productive two-way dialogue" with the French government, which has held talks with Siemens as well over the potential sale.

The French firm said its board would make a decision on the GE offer by the end of May and noted the company recognised "unanimously the strategic and industrial merits" of the GE offer.

"Alstom's employees would join a well-known, major global player, with the means to invest in people and technology to support worldwide energy customers over the long term," said Alstom's chairman and chief executive Patrick Kron.

Siemens offer

However, Alstom is also opening up its books to be inspected by Siemens, which is believed to be preparing a rival bid for the GE offer.

It was also confirmed by Alstom that it would use the proceeds of any GE deal to focus on the other side of its business. This makes TGV high-speed trains that are used across France.

Mr Kron added: "The proposed transaction would allow Alstom to develop its transport business as a standalone company, with a strong balance sheet to capitalise on opportunities in the dynamic rail transport market."

In the early moments of trading this morning on the Paris Stock Exchange, the share price of Alstom has risen quickly on the back of the news of the GE offer for its energy business. Before 08:30 BST, stocks in the company were up by more than nine per cent on the start of the day. Shares in Alstom are now closing in on the firm's 52-week high of 32.46, which could be hit today if the gains continue throughout the session.

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