UPDATE 2-GDF Suez in fresh tie-up talks with Intl Power

* GDF to put non-European assets into Intl Power

* GDF will retain nuclear projects

* GDF would become majority shareholder of Intl Power

* Talks at early stage, no agreement definite

* Intl Power share up 8 pct, GDF top Paris blue-chip riser

(Adds details, shares, background)

By Victoria Bryan and Marcel Michelson

LONDON/PARIS, July 19 (BestGrowthStock) – France’s GDF Suez (GSZ.PA: )
and Britain’s International Power (IPR.L: ) have revived tie-up
talks as GDF Suez seeks to bolster its power production clout in
emerging markets.

The deal would see GDF transfer some of its non-European
assets into International Power, which is focused on the
fast-growing markets of Asia, Australia and the Middle East, in
exchange for a majority stake.

This would double International Power’s capacity and create
a London-listed power company that would be bigger in capacity
than U.S. energy company AES (AES.N: ).

GDF Suez said its businesses involved had a 2009 earnings
before interest, tax, depreciation and amortisation of 2.0
billion euros. With the parent trading at four times EBITDA this
would indicate a value of 8 billion euros ($10.4 billion).

“We reckon it equates to 420 pence a share but that is if
everything goes through – regulatory and politically, so they
are the two achilles heels,” said a trader in London.

Both companies declined to comment on valuation on Monday,
and a GDF spokesman had no comment on the timetable of the
talks.

Shares in International Power rose as much as 11 percent in
early trading on Monday, making it the top blue-chip gainer. The
shares were up 7.92 percent at 341.90 at 0818 GMT.

GDF was up 1.4 percent at 24.66 euros, the top riser on
France’s CAC 40 index (.FCHI: ), while the STOXX Europe 600
utilities index (.SX6P: ) was up 0.37 percent.

The French firm has about 12.9 billion euros ($16.7 billion)
in cash and analysts have said it could struggle to compete
without a sizeable acquisition. [ID:nLDE60K2CF]

However, the stake held in GDF by the French state needs to
remain above 33 percent, making it difficult for the firm to
issue shares for any deal.

GDF said it would retain its nuclear assets and projects and
would transfer its non-European businesses, including those in
North America, Latin America, Middle East and Asia.

International Power is mainly active in markets outside
Britain and owns interests in 45 power stations.
“There can be no assurance that, even if reached, any such
agreement will be completed,” GDF said in its statement.

A spokeswoman for International Power also stressed the
talks were at an early stage.

The two companies had held talks at the start of this year
on a possible asset tie-up, but they ended when agreement could
not be reached.

“The board of International Power believes that the possible
combination warrants consideration given the strategic rationale
and potential for synergies,” it said on Monday.

International Power has a market cap of about $7.4 billion,
compared to $71.4 billion for GDF.

The British company is being advised by JP Morgan Cazenove,
Morgan Stanley and Nomura, while GDF’s advisers are NM
Rothschild, Goldman and Lazard.
(Additional reporting by David Brett in London; Editing by Hans
Peters)
($1=.6519 Pound)
($1=.7706 Euro)

UPDATE 2-GDF Suez in fresh tie-up talks with Intl Power