Shares in London-headquartered electricity generator International Power (LON:IPR) (IPR) jumped over 10% on the main market of the London Stock Exchange (NYSE:LSE) today, as the company confirmed that talks are back on to consolidate its business with GDF Suez Energy’s (EPA:GSZ) international assets.
An earlier proposal to combine the businesses fell through early this year. In January 2010, IPR confirmed that it held preliminary discussions with GDF, however the companies failed to reach an agreement.
The company revealed that it has begun preliminary discussions with GDF to combine its business with GDF’s Energy International Businesses - excluding Europe, except certain assets in the UK and Turkey. The proposed deal would see IPR issue GDF equity in consideration for the assets, and subsequently the French power-generation company would become IPR’s majority shareholder.
“The Board of International Power believes that the possible combination warrants consideration given the strategic rationale and potential for synergies ... discussions are continuing between the two parties regarding the terms of the proposed combination,” IPR stated.
IPR cautioned that “shareholders are advised that there can be no certainty that the discussions between International Power and GDF Suez will lead to any agreement concerning the possible combination”.
The enlarged International Power would be listed on the LSE, and the transaction would constitute a reverse takeover.