Shares in International Power surged by more than five per cent yesterday following talk that French utility GDF Suez is mulling a revised offer for the power station owner, including a cash element, after talks over a possible asset tie-up collapsed in January.
The stock later closed up two per cent at 320.6p during a lacklustre day of trading in London which saw investors check into defensive stocks.
Evolution Securities analyst Lakis Athanasiou said GDF is interested in International Power because it would give it entry into the UK energy market and offer synergies with its US energy business. “Even if no bid eventually materialises, bid speculation will remain and push International Power to value enhancements such as improved dividend payout,” Athanasiou says.
Talks between International Power and France’s state-controlled power giant collapsed after the two failed to strike a deal.
International Power had confirmed the company held preliminary discussions regarding a potential combination of the business with certain power assets of GDF Suez.
GDF Suez is believed to have appointed Rothschild, BNP Paribas and Goldman Sachs to advise on the deal before its collapse.
GDF Suez is said to have €12bn (£10.6bn) in cash at its disposal.
City A.M. Reporter