Shares in French giant Alstom leap on rumoured GE bid

PARIS: Engineering giant Alstom, a top name in French industry, was caught in a swirl of speculation that US group General Electric is about to make a $13.0 billion bid, and its shares leapt.
Alstom, which builds high-speed trains and power stations, said it "is not informed of any potential public tender" to buy its shares.
If a takeover does materialize, it would amount to the biggest ever by General Electric, which makes rail locomotives and aero engines.
A deal would mark a big consolidation in the global engineering sectors targeted by the two groups in which players from emerging countries are becoming redoubtable competitors.
The takeover talk also highlights a renewed appetite by big companies for acquisitions, financed with war chests built up during the recent post crisis years and with the help of cheap money.
Alstom stock jumped at the opening of trading by about 17.0 percent, to settle back during morning trading for a gain of 11.63 percent to 27.17 euros.
The financial news agency Bloomberg had reported on Wednesday that GE was in advanced talks to buy Alstom for more than $13.0 billion (9.4 billion), and a deal could be announced next week.
The report said that such a deal was believed to have the backing of French construction, media and telecom group Bouygues which became a main shareholder in Alstom when it bought the stake held by the French state in 2006.
Alstom, which got into severe difficulties 10 years ago, is a political hot potato in France against a background of deep concern about the decline and loss of competitiveness of industry and record high unemployment.
Alstom shares have had a bumpy ride recently in response to rumours that the group was running into financial difficulties, in part because of competition from emerging economies.
By contrast, GE has reported a net profit of $3.0 billion for the first quarter of 2014, a fall of 15.0 percent from the equivalent figure last year which was boosted by exceptional items.
The French Socialist government, in a policy switch to help businesses and boost exports, laid out a new economic program on Wednesday, cutting planned public spending alongside measures to reduce taxes on businesses.
Alstom said in a short statement on Thursday, responding to the takeover speculation, that it was constantly reviewing its strategic options in different sectors of its activities and would provide information on this when it published annual results on May 7.
A spokesman for GE contacted by AFP declined to comment on the bid report.
Early on Thursday, Bouygues also declined to comment to AFP.
The fall of Alstom shares last year had pushed Bouygues into a loss in 2013.
On Wednesday, shares in Bouygues surged by 5.0 percent to 30.45 euros on the prospect that the company might obtain a good price from GE for its shares in Alstom.