PARIS (AFX) - Knight Vinke Asset Management, a minority shareholder of Suez, said that although a proposed merger of the company with Gaz de France makes strategic sense, Italy's Enel SpA should be allowed to make a rival offer to acquire Suez.
Yesterday, Suez and GDF announced their intention to merge in a deal that would protect Suez from a potential takeover offer from Enel, which last week refused to rule out a hostile bid in order to acquire its Electrabel energy unit.
'We believe that a full merger with GDF could make sense from an industrial point of view, and merits careful consideration,' said KVAM, which is partly owned by CalPERS, the California public employees' retirement system. Both Knight Vinke and CalPERS are shareholders of Suez.
But the investment house also said the planned Suez/GDF merger is a 'protectionist move', and said that 'Enel should be permitted to make an offer or a counter-offer for Suez without hindrance from political authorities'.
Knight Vinke also renewed its call for a split of Suez's energy and industrial services units, and said that Suez should spin off its Environment division of water and waste services to shareholders before any merger with GDF. paris@afxnews.com js/har COPYRIGHT Copyright AFX News Limited 2005. All rights reserved. The copying, republication or redistribution of AFX News Content,inculding by framing or similar means, is expressly prohibited without the prior written consent of AFX News. AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited