Areva, Suzlon must run REpower together, says Tanti

France's Areva SA and Suzlon Energy Ltd, which are competing to take control of Germany's REpower Systems AG, must agree to run the company together, Suzlon Chairman Tulsi Tanti said.

"There is no other option in the interest of Repower and our shareholders than to work with each other,'' Tanti said in a phone interview from Pune.

"If both large shareholders don't cooperate, REpower will suffer,'' he added.

Suzlon is planning a ¤1.2 billion ($1.6 billion) acquisition of German wind-turbine maker REpower after topping Paris-based Areva's bid last month.

Suzlon, which wants to buy REpower to expand in Europe and controls a 30 per cent stake in the German company, is expected to announce its new shareholding on May 25, a day after its offer to buy shares from REpower shareholders closes, Tanti said yesterday.

"We are very positive and open to work with Areva,'' Tanti said. "We believe both companies can add value to REpower. So, in the interest of REpower and Suzlon there is a need to cooperate,'' he added.

Areva's 30 per cent stake in Repower equals Suzlon's current stake in the German company.

Suzlon last month bought a 7.7 per cent stake in Hamburg-based Repower and offered 150 euros apiece for the stock outstanding. That's 19 per cent more than its previous offer and 7 per cent premium to the bid by Areva, the world's largest maker of atomic power stations.

Repower said on April 17 it prefers Suzlon's offer to Areva's 140 euros a share bid. The same day Areva extended the period of its offer to buy the 70 per cent of Repower it doesn't own, gaining extra time to consider topping Suzlon's price.

Areva, the world's largest manufacturer of nuclear power plants, said it had no plans to sell its stake in Repower and was maintaining an offer for control of the company.

"Areva has no plans to sell its stake in Repower,'' a spokesman for the company, who declined to be identified, said by telephone from Paris today. ``Our offer is maintained.''

Suzlon plans to sell as much as $300 million of convertible bonds to fund acquisitions.

The company will allow investors to convert the five-year zero-coupon bonds into its shares at Rs 1,800, about 58 per cent above the closing price yesterday, according to a term sheet sent to investors today. Deutsche Bank AG will manage the sale.