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Alstom shares jump on report of USD 13 bn GE bid

Shares in ALSTOM jumped more than 14 percent on Thursday after a report that U.S. conglomerate General Electric was in talks to buy the struggling French turbine and train maker for about $13 billion.

The companies may announce the deal as early as next week, Bloomberg cited people with knowledge of the matter as saying in a report late on Wednesday.

If confirmed, a takeover offer from a foreign company would raise eyebrows among politicians and unions in France, where Alstom employs around 18,000 staff, or 20 percent of its global workforce.

The group was bailed out by the French state a decade ago and has strongly relied on orders from national rail operator SNCF and utility EDF .

A deal, which would be GE’s biggest ever and would hand it control of Alstom’s high-speed TGV trains and rail-signal technology, has the support of Bouygues , Alstom’s biggest shareholder with a 29 percent stake, the report said.

Alstom, which has put its transport division up for sale in an attempt to fill a hole in its balance sheet, said on Thursday it was “not informed of any potential public tender offer for the shares of the company” and promised an update on its options when it releases annual results on May 7.

Bouygues, which will hold its annual shareholder meeting later on Thursday, would not comment beyond saying that it supported Alstom’s strategy but did not have control over the company. A GE spokesman declined to comment.

Before the GE bid report, Alstom shares had slumped 20 percent in the past 12 months on concerns over its cash flow. Those concerns prompted Bouygues to take a $1.9 billion writedown on its Alstom stake inFebruary.

Alstom shares were up 14.5 percent at 27.88 euros at 1143 GMT, short of the reported offer price, which works out at around 30.5 euros per share.

Alstom’s transport chief told Reuters in February the group may use an initial public offering (IPO) to sell a stake in the business as early as June if a trade buyer could not be found sooner. It was unclear at this stage what impact a potential deal with GE would have on the unit.

Source *www.eleconomista.es

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