GDF Suez to stick at 70% of IP

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The Independent Online

French utility group GDF Suez will not increase its stake in International Power above 70 per cent before 2013 as part of its reverse takeover of the FTSE100 group.

The stand-still agreement prevents GDF bidding for the remainder of International Power following last week's agreement to inject its non-European electricity and gas businesses into the group. The deal will give GDF a £13bn stake in the British group once the deal is completed, probably at the start of next year. The French increased the holding from an initial 65 per cent during tough negotiations. But the documents detailing the deal will reveal the stand-still provision that stops GDF raising its holding for two years. The agreement also allows the company to subscribe for extra shares to maintain its stake if IP issues new stock to raise capital or buy assets.

The deal means IP will remain a UK-listed company but be a subsidiary of GDF, in which the French government has a 35 per cent stake and a "golden share" that allows it to exert control.