9 November, 2009
UPDATE 3-Areva gets 3 transmission/distribution unit offers
* Offers from Toshiba, GE and Schneider/Alstom
* Areva says will now review bids
* GE bids solo; Toshiba with Japanese fund
By Nina Sovich and Nathan Layne (Updates story with confirmation of bidders)
PARIS, Nov 9 (Reuters) - French nuclear reactor builder Areva SA (CEPFi.PA) said Monday it has received three binding offers, as expected, for its electricity transmission and distribution (T&D) business.
All three bidders that were in the running in recent weeks put in final offers, although the make-up of the consortiums changed slightly.
U.S.-based General Electric Co (GE.N) made a solo bid, after weeks of intense negotiations with various financial partners -- including CVC Capital Partners and the private equity arm of AXA SA (AXAF.PA) -- failed to come to fruition.
Japan's Toshiba Corp (6502.T) made an offer in consortium with the investment fund Innovation Network Corp of Japan, leaving behind a previous partner with whom it had been linked, the Abu Dhabi National Energy Co or Taqa TAQA.AD. [ID:nL9177274]
French partners Alstom SA (ALSO.PA) and Schneider Electric SA (SCHN.PA) also made a joint offer, as expected.
Areva said it is reviewing the bids but gave no indication when it would choose a winner. A source close to the situation told Reuters that a final decision could be made by Nov. 23.
The T&D business, which analysts estimate is worth between 3 and 5 billion euros ($4.5-7.5 billion), is being sold to fund Areva's expansion plans. Through the T&D sale and a capital increase, Areva hopes to raise 11 billion euros for its development.
Bids were expected from all three players, but the fact that GE went alone and the presence of the Japanese investment fund Innovation Network alongside Toshiba was a surprise. Innovation Network, which is led by the Japanese government and backed by 16 private equity players, has $862 million to invest provided by the Japanese government and $8.5 billion in loan guarantees.
Both GE and Toshiba were in intense discussions with potential partners until the last minute to put together consortiums with enough financial firepower to undertake the bid for Areva T&D.
In the end, GE decided to go alone, in part to blunt criticism made in recent weeks by its rivals Alstom and Schneider that GE's financial partners would have short-term profit aims instead of concern for the long-term health of T&D.
"To reinforce the strategic and industrial nature of its proposal, and the company's long-term commitment to the T&D business, GE's bid was submitted without financial partners," said GE in a statement.
Some analysts regard as Alstom-Schneider's bid as having the best chance of success, since the French government has a history of favoring French bidders for domestic assets. The French government owns 91 percent of Areva and plays a central role in setting the firm's strategy, so it is likely to weigh in on the T&D sale.
In addition, Alstom used to own the T&D business before falling on hard times and selling it to Areva for 920 billion euros in 2004 as a way to alleviate crushing debt.
But French unions for Areva are opposed to the French groups' bid because they fear the impact on jobs and oppose Alstom's and Schneider's plan to split the company up.
RAISED OFFERS?
Meanwhile, a source close to the matter told Reuters that the three bidders had raised their offers ahead of Monday's deadline.
"They all raised the bids significantly," said the source, while declining to provide details.
Earlier, newspaper La Tribune said Toshiba and General Electric were ready to offer more than 4 billion euros, while the French tandem of Alstom and Schneider were offering 3.5 billion euros.
None of the bidders disclosed the amount they had offered for the T&D unit on Monday. (Reporting by Nina Sovich, Nathan Layne, and Benjamin Mallet, editing by Gerald E. McCormick)
Source: http://www.reuters.com
UPDATE 3-Areva gets 3 transmission/distribution unit offers Added: (09.11.2009)
Back to invest list
