PARIS May 22 The French government is studying an all-French solution for Alstom that could involve public funds to strengthen the engineering group if no deal is reached with suitors General Electric or Siemens , Economy Minister Arnaud Montebourg said on Thursday.
Montebourg first floated this "plan C" during a meeting with Alstom representatives on Wednesday evening, presenting it as an alternative to the $16.9 billion bid from U.S.-based GE to buy Alstom's power arm, and to a rival expression of interest from Germany's Siemens.
"We have launched a study of plan C," Montebourg told Reuters on the sidelines of a building visit in Paris.
"Plan A is GE, plan B is Siemens, plan C is a home-based solution," he said, adding that the government was still working on this third option that would involve French capital, whether from privately-owned companies or state-owned companies.
According to two trade unionists who met Montebourg on Wednesday, the minister said the proposals from GE and Siemens were both unacceptable as they stood.
He said the government was seeking better offers and was ready to use a decree it issued last week to widen its power to block foreign takeovers in strategic sectors.
The minister also told the trade unionists that the government would look at the opportunity of taking a stake in Alstom to strengthen the cash-strapped company, which already received a state bailout a decade ago, and have a bigger say in its future.
"He said he had asked his services to study a plan C in the spirit of the one that was done in 2003," said Philippe Pillot, a Force Ouvriere union representative at Alstom Transport.
Back in 2003, the French state took a 21 percent stake in Alstom worth 720 million euros ($984 million).
An Alstom spokeswoman declined to comment.
Alstom is already in talks with GE over a 12.35 billion euro bid for its power arm, which it is due to review by the end of May. However, under strong political pressure, it has opened its books to Siemens so it can propose its own deal if it wants to.
The French government has repeatedly criticised GE's bid, favouring an alliance between the companies rather than a straight sale of Alstom's power arm that would leave the French group with just its smaller transport business.
Paris has advocated instead a European tie-up between Alstom and Siemens that would create "industry champions" in power and transport. Siemens has not yet made a formal offer.($1 = 0.7318 Euros) (Reporting by Natalie Huet and Yann Le Guernigou; Editing by Andrew Callus)