French state-owned utility EdF on Friday denied a report it contacted management of German utility RWE, or German authorities, in regards to a takeover.
The initial report from Germany’s SWR radio claimed EdF contacted the German government to get the green light for the takeover, but EdF denied the move to CNBC.
Shares of EdF rose 0.3%, in the face of declines in the CAC-40, while RWE stock jumped about 5.8% on the news, suggesting traders consider the takeover to be a likely scenario.
Any potential takeover between the two companies may have complications due to cartel issues.
EdF already has a 45% stake in Germany’s regional utility EnBW, in the south of Germany, and they are ready to divest this in order to avoid antitrust problems if a deal occurs. EdF is unlikely to divest the stake in EnBW if the merger does not take place.
RWE said it does not comment on market speculation, when contacted by CNBC.