British utility International Power Plc (IPR, IPR.L, IPRPY.PK) Wednesday said it has rejected the indicative proposal of 390 pence per share cash offer from French natural gas and electricity supplier GDF Suez SA (GDFZY.PK, GDSZF.PK), citing the offer grossly undervalues the company.
Last month, GDF Suez confirmed that it has made an approach to the independent directors of International Power for the remaining shares not already held by it.
The French utility said at that time, "GDF SUEZ will continue to consider its position in respect of the International Power shares it does not already own based on a strict disciplined and value-driven approach to earnings, indebtedness and returns...GDF SUEZ would consequently consider a revision upwards of its current disposal plans."
GDF had said a full merger of the company and International Power would provide significant benefits to both businesses, and enable International Power to achieve its growth strategy more quickly and with greater certainty than under the existing structure.
An independent committee of International Power's board considered the proposal with its advisers and has unanimously concluded that the proposal could not be accepted for consideration.
As per the terms of a Relationship Agreement between GDF Suez and International Power, GDF Suez and its affiliates are generally restricted from making a takeover offer for all or any of the outstanding IPR ordinary shares for the period until August 3, 2012, the company added.
IPR.L is currently trading at 402.73 pence, down 0.07 percent, on a volume of 4.15 million shares.
In Paris, GDF Suez trades at 18.85 euros, down 1.04 percent, on 899 thousand shares.
For comments and feedback: editorial@rttnews.com