French engineering group Alstom said on Sunday that it has suspended trading in its shares as expectations grew for a possible bidding war between industrial giants General Electric and Siemens.
The announcement came after French President Francois Hollande held a special meeting with senior ministers to discuss the future of the beleaguered firm, once considered a jewel of French industry that has fallen on hard times.
Germany's Siemens earlier in the day said it wanted to discuss strategic opportunities with Alstom, which it pursued without success a decade ago, after reports that US giant GE was seeking to buy the company's power generation arm.
"Given the strategic issues for industry and the French economy, the government will not accept a decision, whatever it is, in haste or without considering the interests of the country," said France's Economy Minister Arnaud Montebourg.
Alstom said in a statement its shares would be suspended from trading in Paris until no later than Wednesday morning as it "continues and deepens its strategic reflection" on the future of its business, without giving further details.
The potential bidding war for the former industrial icon comes as France is seeking to jump start its economy by cutting public spending while relieving taxes on businesses.
Hollande's office said he was due to meet GE chief Jeff Immelt early on Monday to discuss options on the deal.
Although the French state has not held a stake in Alstom since 2006, France's Socialist government wants to obtain guarantees on "jobs, the location of activities and energy independence", Hollande's office said.
Paris will also be "extremely vigilant with regard to the continued excellence and independence of the French nuclear industry", the economy ministry added.
Montebourg, a fierce protector of French industry, has pledged to study various options for Alstom following reports that GE would bid to buy the company's power-generation division, accounting for more than 70 percent of its business with revenues of 14 billion euros ($19 billion).
- Protecting French interests -
Press reports said GE, which has 305,000 employees around the world and posted revenues of $146 billion last year, was ready to fork out 10 billion euros for the deal.
Bouygues, Alstom's largest shareholder with 29.4 percent of the company, is also said to favour the offer.
But the US giant is up against another heavy hitter in Siemens, whose chief executive Joe Kaeser in a letter reportedly offered Alstom a cash and assets swap, valuing the firm's wing at between 10 and 11 billion euros.
Kaeser also pledged to guarantee jobs in France for at least three years.
Siemens said in a statement it had "submitted a letter to the board of Alstom to signal its willingness to discuss future strategic opportunities", without giving further details.
The company declined comment when contacted by AFP.
When Alstom was on the brink of collapse in 2003-2004, the French state strongly opposed a takeover by Siemens.
The group is once again facing a financial crunch and its shares have dropped sharply in the last year.
But Alstom chief Patrick Kron is said to remain strongly hostile to any tie-up with the German giant.
"A Siemens offer has the advantage of being European," said one observer. "But is the solution better for French interests than the GE offer? The answer to that question will determine which offers wins."
Analysts at Societe Generale noted that a "counter offer from Siemens looks unlikely given the competition problems that it would present in Europe".
The French stock market regulator suspended trading in Alstom shares on the Paris stock market Friday after they shot up by almost 11 percent to 27.0 euros on bid speculation.
The pressures on the group, which put part of its rail activities up for sale earlier this year, come as Paris is seeking to make the country more competitive by cutting company taxes to raise competitiveness, exports and growth and reduce record unemployment.
The measures, highly unpopular with the Socialist left, are intended to get industry back on a competitive track, boost growth and exports and reduce record employment.
Jean-Claude Mailly, the head of the Force Ouvriere trade union on Sunday called for the government to buy Alstom shares to allow it a greater say in the group, as one of France's "strategic sectors".
GE employs 11,000 workers in France and its European headquarters are located in the eastern town of Belfort. Alstom meanwhile counts 18,000 employees in the country.