General Electric Co. announced that it reached an agreement with the French government to prolong the expiration date of its 17 billion-dollar acquisition of the energy business of Alstom SA with three weeks. The company was requested to delay consideration of its offer until June 23rd by the French authorities, which are looking for better terms of the eventual deal.
Alstom SA came up with a brief statement, welcoming the step undertaken by General Electric. According to a person with knowledge of the situation, Alstom ws still convinced that a deal with General Electric Co. would be the best outcome for the companys shareholders.
According to the statement made by General Electric Co., the company has made the decision “to facilitate ongoing discussions with the government”. The company also said in its statement, which was cited by Bloomberg: “The industrial project we have presented is good for Alstom, for France and for GE, and our discussions have continued to be constructive. We view this extension positively.”
The board of Alstom SA has still not officially approved the offer of General Electric. The French Economy Minister Mr. Arnaud Montebourg has called the offer “unacceptable” and has expressed his disapproval. He, on the other hand, has encouraged Siemens AG to enter the competition over the purchase of Alstoms energy assets and make its own offer.
As reported by the Financial Times, the Energy Minister of France Mr. Monteboug wrote to the Chief Executive Officer of General Electric, saying: “As it stands, we unfortunately cannot support the proposals you have made.”
Now, after the decision of General Electric to extend the expiration date of its bid, the French government made a statement, revealing that this decision will provide it with the opportunity to work with the companies in order to address their concerns. The governments officials also shared that finding a solution of the situation “efficiently and rapidly” is of everyones best interest.
General Electric Co. was 0.08% up to close at 26.51 dollars per share yesterday, marking a one-year change of +11.11%. According to the information published on CNN Money, the 11 analysts offering 12-month price forecasts for General Electric Co. have a median target of 28.00, with a high estimate of 32.00 and a low estimate of 27.00. The median estimate represents a +5.62% increase from the last price of 26.51.
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