French utility GDF Suez has agreed to buy the 30 percent of British power producer International Power (IPR) it does not already own for ￡6.8 billion (US$10.8 billion), increasing its exposure to fast-growing markets around the world.
The ￡4.18 per share offer, represents a 7 percent premium on an earlier offer from GDF, and values International Power at about ￡22.8 billion and is expected to add to the French group’s earnings.
“IPR has leading positions in regions supported by steady energy demand such as South America, the Middle East, Southeast Asia and Australia,” GDF said yesterday.
“The offer enables GDF Suez to take full control of a unique platform for development in fast growing countries, where the group intends to significantly increase its investments in the future,” the company added.
Following completion of the offer, GDF intends to increase its guidance for capital expenditure in fast growing markets to between 40 percent and 50 percent of the total, up from 30 percent currently.
Analysts have said a deal would make good strategic sense for GDF given IPR’s strong growth prospects.
IPR said the offer, which would also see its shareholders receive a 6.6 euro cent dividend, was attractive, given the company’s position in international power generation markets and its growth potential.
The company had earlier this month rejected a ￡3.90 per share preliminary offer by GDF that valued the company at ￡19.9 billion, calling it too low.
IPR shares were up 3.3 percent at ￡4.173 in London, while GDF were up about 1 percent in Paris at 18.15 euros.
GDF completed its acquisition of 70 percent of IPR in February last year, creating the world’s largest independent power producer. At the time it agreed not to bid for the remaining shares for 18 months, a lock-up which expires in August.