GDF Suez has finally agreed on a deal to scoop up the 30 per cent of the UK energy provider International Power that it does not already own – but only after the French utility raised its offer by 7 per cent to £6.4bn.
In a clear victory for International Power's independent board committee, the French company increased its bid from 390p a share to 418p, two weeks after the board's six directors unanimously rejected its previous offer for being too low.
The new bid – which is entirely in cash and which the board has unanimously agreed to recommend to shareholders – values the whole of International Power at £22.8bn.
Angelos Anastasiou, an analyst at Investec, said: "The independent board committee can certainly hold their heads up high because they have managed to squeeze quite a high price out of GDF.
"It is particularly important for independent directors to do their jobs when there are minority shareholders involved, to make sure they are being dealt with fairly. And, with GDF as 70 per cent owners of the company, this was most definitely a minority situation."
Sir Neville Sims, the chairman of the independent committee, said: "GDF Suez has made an attractive proposal and the independent IPR directors have concluded that it represents a price that fairly reflects the company's position in international power generation markets and its inherent growth potential. Accordingly, the independent IPR directors will be unanimously recommending that IPR shareholders vote in favour."
The revised offer represents a 20.8 per cent premium to International Power's closing share price on 29 February, the day before news of a potential deal leaked into the market.
International Power owns 45 power stations, six of which are in the UK, including the coal-fired station at Rugeley in Staffordshire (pictured) and the oil-powered Indian Queens facility in Cornwall.
As part of the deal, International Power's investors will be allowed to keep the final dividend of €0.06 (5.4p) a share for 2011, in effect increasing the value of GDF's bid to 423.4p. The dividend was also included in the previous offer.
Gerard Mestrallet, the chairman and chief executive of GDF, said the deal "will allow the group to fully capture growth in fast-growing markets".