26 November, 2009
UPDATE 1-Toshiba makes highest bid for Areva's T&D -sources
* Toshiba bid at 4.5 bln euros - sources
* Areva supervisory committee likely to meet Fri or Mon
* Toshiba promises if wins no layoffs, or spin-off
* Decision could come within days, says Lagarde
(Adds comments from sources)
PARIS, Nov 26 (Reuters) - Toshiba (6502.T) put in the highest bid, at 4.5 billion euros ($6.79 billion), for Areva's transmission and distribution (T&D) unit, two sources close to Toshiba told Reuters on Thursday.
"Toshiba is the best bidder in terms of price and industrial policy," one of the sources said.
Areva, which is majority-owned by the French state, is selling its power T&D unit as part of an 11-billion-euro plan to boost the nuclear reactor maker's global expansion.
The sale has turned into a politically-charged battle between Toshiba and the other bidders, General Electric (GE.N) and the French consortium of Alstom (ALSO.PA) and Schneider Electric (SCHN.PA).
The French government will play a major role in deciding the winner because it owns 93 percent of Areva. On Thursday, Prime Minister Francois Fillion said the state did not favour any one bidder and was studying all offers.
A decision on the auction is expected within days, Economy Minister Christine Lagarde told Reuters on Wednesday on the sidelines of a meeting of the ruling UMP party.
With a decision near, the companies are all making their case in the press and in the halls of government.
In joint comments to Reuters, both sources close to Toshiba said the Japanese bid was solid and refuted a charge made by rivals that its financing was not secure.
One source said that Japanese company had offered 4.5 billion euros for T&D, of which 2.4 billion was equity and 1.8 billion was pro forma debt.
Part of the equity financing comes from the Innovation Network Corp of Japan (INCP), which is 85 percent owned by the Japanese government.
"They (INCP) will take a minority stake in T&D of 30 percent. They are a long-term investor controlled by the Japanese government," one of the sources said.
"There are no private equity investors here," the source added.
The source said financing will also come from Toshiba's balance sheet and lines of credit. Debt financing has been secured through Mizuho Corp Bank and Sumitomo Mitsui Bank Corp.
Both sources argued that Toshiba's industrial plan was better than that of Alstom-Schneider, which plans to divide the business in half.
Alstom-Schneider's plan to split the business is opposed by Areva management and unions who say it would fracture the profitable unit and lead to job cuts. Lagarde has said social factors, such as layoffs, would factor into the government's evaluation of the bids.
"By nature this is an acquisition that combines two assets that are very complimentary... So no spin-off. No restructuring. No layoffs," the source close to Toshiba said.
Both sources said the bid met all the criteria laid down by the French government, including protecting domestic jobs and keeping the T&D operation headquartered in France.
But the second source questioned the soundness of the government's decision-making process and the role reportedly being played by Nicolas Sarkozy.
"It seems like the French president really wants the French to win," the second source said.
A spokesman for Toshiba declined to comment on the ongoing negotiations over the T&D sale.
($1=.6625 Euro)
(Editing by Leila Abboud; editing by John Stonestreet)
((nina.sovich@thomsonreuters.com; +33 1 49 49 51 45; Reuters Messaging: nina.sovich.reuters.com@reuters.net)) ($1=.6625 Euro)
Source: http://www.reuters.com
UPDATE 1-Toshiba makes highest bid for Areva's T&D -sources Added: (26.11.2009)
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