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Elf counter-bid gets OK
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July 29, 1999: 9:02 a.m. ET
Regulator allows $51B defense; EC launches suit against 'golden share'
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LONDON (CNNfn) - France's financial regulator gave the green light to Elf Aquitaine's counter-bid for rival oil company TotalFina Thursday, just as the European Commission launched legal proceedings which could open up the battle to an international bidder.
Regulator Conseil des Marchés Financiers ruled that Elf's "Pac-man" defense - an effort to combat the TotalFina move by biting back with a bid of its own - can proceed. The defensive offer, named for a video game, will close after TotalFina's original offer for Elf closes.
Elf shares rose 2 euros to 160.50 euros in Paris Thursday afternoon, while TotalFina stock dipped just less than 1 percent to 74.30 euros.
The regulator's decision comes just a day after the European Commission commenced proceedings against the French government in the European Court of Justice because of its "golden share" in Elf.
The Commission said the terms of the share -- which, among other things, allows for a veto of any possible deal -- are incompatible with European rules on free movement of capital. The government's "objective of protecting national interests creates uncertainty for investors" who want to buy shares in the company, the Commission claimed.
The latest developments could attract interest in the battle from overseas bidders, which have hitherto been put off by the likelihood of the French government insisting on a "French solution."
French Finance Minister Dominique Strauss-Kahn promised recently he would not use the government's golden share in Elf to influence the outcome of the bidding battle, although he made it very clear he did not want either group to fall into "Anglo-Saxon" hands.
TotalFina shocked Elf by launching a surprise takeover offer at the beginning of July. Elf called the offer "hostile", and eventually responded with an offer of its own to buy Total.
A combiined Elf/TotalFina would create the world's fourth-largest oil and gas company.
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Elf Aquitaine
TotalFina
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