French regulators will investigate possible insider trading linked to a report that billionaire Francois Pinault was ready to bid for Suez SA's water, waste and services unit, Finance Minister Thierry Breton said.
The Les Echos newspaper reported Oct. 12 that Pinault was ready to pay 18 billion euros ($23 billion) for the Suez businesses, without saying where it got the information. Suez shares rose to a five-year high.
Pinault's plan was ``a project which came to light in June and which was dead in the water by September,'' Breton told lawmakers at France's National Assembly today. ``It was exhumed and the market regulators will look at why, and who benefited,'' he said.
Suez plans a 40.1 billion-euro merger with Gaz de France SA to create Europe's second-largest utility. Investors including Eric Knight of Knight Vinke Asset Management say the deal undervalues Suez. The prospect of another offer boosted the shares by as much as 3.5 percent Oct. 12. to 35.84 euros, their highest since Oct. 11, 2001.
Paris-based Suez said it had no plans to shed its environment unit, which is the world's second-largest water company. Rome-based Enel SpA (ENEL) said it held talks with Pinault's holding company Artemis over a possible cooperating for the purchase before abandoning the plan.
Suez Chief Executive Officer Gerard Mestrallet wrote to French regulators today to ask them to investigate and determine ``that there was no false information that could distort this operation,'' Breton said.
European Union competition regulators plan to rule on the proposed Suez Gaz de France merger Nov. 24. Breton said he is ``reasonably optimistic'' the deal will be approved.
To contact the reporter on this story: Emma Vandore in Paris at evandorebloomberg.net.
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