Alstom CEO Patrick Kron told an investor conference Germany's Siemens could "dream" of swapping assets with the French engineer but it was for shareholders to decide, conference host Exane BNP Paribas said on Thursday.
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Alstom's board is due to choose by Monday between a 12.4-billion-euro ($16.8 billion) cash offer for its power arm from U.S. suitor General Electric - which GE boss Jeff Immelt is expected to improve upon later on Thursday - and a rival proposal from Siemens and Japan's Mitsubishi Heavy Industries (MHI).
The two offers are very different in nature: Whereas Siemens would take just the gas turbines arm of Alstom and MHI minority stakes in its other power activities, GE wants all of Alstom's energy arm, which includes its thermal power, renewable power and grid businesses and accounts for 70 percent of its revenue.
Sources close to Alstom say it regards the GE offer as the only one having binding status at this stage, despite Siemens saying that its proposal with MHI values Alstom's power arm at 14.2 billion euros - nearly two billion euros more than GE's.
"They want our gas activities... and we should take their Transport business...well they are allowed to dream," Kron told an investment seminar hosted by Exane on Wednesday, the Paris-based investment house wrote in a note.
"At the end of the day, despite some impressions to the contrary, it will be the shareholders who decide," it further quoted him as saying, noting Kron stressed the board will review the offers based on their financial criteria and feasibility.
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An Alstom spokeswoman declined to comment.
The tug-of-war for the power business of the 86-year-old French company has drawn in France's Socialist government, which has given itself powers to veto any deal in the name of protecting local jobs and influence over a key sector.
In a new twist, a source close to the talks said the French state bank BPI was ready to take a stake in the future Alstom regardless of whom it tied its fate to - either taking a stake in its remaining transport arm in the event of a deal with GE or taking a stake in Alstom as a whole if the Siemens-MHI proposal were to win out.
Either scenario would mean the French state ending up with a minority stake in some Alstom activities and would be possible if 29-percent shareholder Bouygues decided to sell some or all of its stake in the group.
IMPROVED GE OFFER
Later on Thursday General Electric's chief executive Jeff Immelt will unveil an improved offer for Alstom's energy arm to the French government and Alstom unions, labor representatives and sources close to the U.S. conglomerate said.
Le Figaro daily reported that GE would propose selling part of its business to Alstom and have the French firm remain a shareholder in its power grid business, in a bid to allay French concerns about the national champion losing its influence.
"He (Immelt) will offer to sell to Alstom Transport GE's rail signaling business whose revenue is estimated at 600 million euros against 1.4 billion euros for Alstom's signaling business," Le Figaro said without citing its sources.
"In addition it would renounce buying the whole energy business of the French group and propose that it (Alstom) stays as shareholder of the grid business."
Immelt told French lawmakers last month his group would set up global headquarters for the grid, hydro, offshore wind and steam turbines businesses in France. Immelt also said GE was considering a tie-up in rail signaling that would give Alstom control of that business.
A source with knowledge of the matter said on Wednesday that the government would make its opinion known ahead of the decisive Alstom board meeting.
Finance Minister Michel Sapin reiterated on Thursday the official government line that it is neutral.
"We are not here to support one position or the other," he told French digital channel i<Tele. "(The government) is trying to up the stakes, in simple terms, it is trying to get improved offers and so the Alstom board will have better offers to choose from than what they did to start off with."