GDF Suez offers £1.3bn dividend to sweeten International Power takeover
Monday 09 August 2010
The French power giant GDF Suez is close to agreeing a takeover of its British rival International Power (IP), with an announcement as early as tomorrow.
The two companies had resumed talks after failing to agree a deal earlier this year. It seems the saga could be drawing to a close with another UK group falling into foreign hands.
Reports at the weekend said investors in IP, which supplies electricity to four million British households, were in line for a bumper payout from the deal. GDF is believed to be offering a special dividend of £1.3bn to sweeten the agreement.
Neither side would comment yesterday. It is understood that the companies may announce tomorrow – at their respective half-yearly results presentations – that IP's board has recommended the offer to its shareholders. GDF, which is 36 per cent owned by the French government, said last month that it was in preliminary discussions with IP about "a possible combination".
GDF plans to take control of two-thirds of the group with existing investors keeping the remaining shares.
Neil Woodford, head of investment at Invesco, which has an 11 per cent stake in IP, had warned the suitor in July that any approach "must entail some form of cash premium to reflect change of control".
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