France tells GE and Siemens: Alstom proposals still not good enough

Tue Jun 17, 2014 3:30pm EDT
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By Natalie Huet and Elizabeth Pineau

PARIS (Reuters) - The French government raised the stakes in the battle for engineering group Alstom on Tuesday, telling rival suitors General Electric and Siemens to come up with better offers.

President Francois Hollande's government has given itself the power to veto a deal on the grounds it does not want Alstom (ALSO.PA: Quote), an innovator and big employer, to sell the bulk of its business to a foreign firm without the state having a say.

In a crunch week ahead of Monday's deadline on GE's (GE.N: Quote) American bid, Germany's Siemens SIEG.DE presented Hollande with a joint proposal with Japan's Mitsubishi Heavy Industries (7011.T: Quote) that it said valued Alstom's power arm at 14.2 billion euros ($19.3 billion) - above GE's 12.4 billion offer.

But Hollande's government swiftly responded by saying it expected better efforts from both bidders.

"The talks between the state and the different companies are going to continue this week," a source in Hollande's office said after the meeting with chief executives Joe Kaeser of Siemens and Shunichi Miyanaga of MHI to hear their proposal.

"The offers must be improved," the source said.

However, Kaeser said he saw no reason to discuss improving a proposal which he reckoned was already the better of the two on the table for Alstom in terms of asset valuation, strategic future and jobs.

"Why would a superior offer be improved if it is superior already? There is no reason for us to discuss that question at this time," he told a joint news conference with Miyanaga.   Continued...

A car drives past a plant of French engineering group Alstom in the Swiss town of Birr, west of Zurich, October 4, 2010.  REUTERS/Arnd Wiegmann