PARIS (Reuters) – French utility Veolia <VIE.PA> will increase its offer to buy the bulk of Engie’s <ENGIE.PA> stake in smaller rival Suez <SEVI.PA> and has the financial capacity to do so, CEO Antoine Frerot said on Friday.
Frerot also told reporters that Veolia would not ask for a seat on Suez’s board if the company buys Engie’s stake.
He did not specify by how much Veolia would increase its offer.
Veolia last month offered Engie 2.9 billion euros ($3.39 billion) for a 29.9% stake in Suez, with a view to subsequently taking full control of its rival by buying up more shares.
Engie, which owns almost 32% of Suez, rejected Veolia’s initial advance but has said it would consider a higher offer.
Engie is due to hold a board meeting on Friday.
Suez sees Veolia’s bid plan as hostile and is working on finding a consortium of investors to put together a rival bid for Engie’s stake.
The company also set up a foundation to protect its water business in France that Veolia plans to sell to Meridiam Infrastructure.
Frerot said he was hoping to find a way to fend off the foundation that Suez put in place.
He said that the foundation was “disabling” for Veolia’s offer which remains valid until Sept. 30.
Suez shares were up 3.9% at 0944 GMT.
($1 = 0.8565 euros)
(Reporting by Benjamin Mallet; writing by Matthieu Protard; editing by Jason Neely and Barbara Lewis)