=DJ UPDATE: ACEA To Issue EUR500 Million 10-Year Bond

(Adds response from GDF Suez, context)

   By Christopher Emsden
   Of DOW JONES NEWSWIRES

ROME (Dow Jones)--Rome utility ACEA SpA (ACE.MI) said late Wednesday it would issue a 10-year bond for EUR500 million.

The bond will be sold to institutional investors and traded on the Dublin and Luxembourg bourses, ACEA said after a board meeting.

The board also approved a mandate for the company's chairman and chief executive to seek a legal solution to its dispute with GdF Suez SA (GSZ.FR), which has a 10% stake in ACEA.

ACEA claims that GDF has violated terms of some of their joint ventures, particularly by seeking to expand in Italy outside of those enterprises, including by selling gas directly in Italy. The utility, controlled by the Rome municipality, also has decided it opposes the sale of its power-generating facilities to the French partner.

GDF Suez's board responded by saying that it is "ready to confront with arbitration and ... is confident in its outcome," saying it saw no grounds for such proceeding anyway.

Arbitration procedures will be set up at the Chamber of Commerce in Paris. Still, analysts say the dispute is longstanding and note the procedures may serve only to hasten an agreement.

"Any arbitration will be detrimental to ACEA's business and stakeholders," GDF Suez said.

Rome Mayor Gianni Alemanno said earlier this month that the city could reduce its 51% stake in ACEA.

ACEA shares opened down EUR0.07, or 0.9%, at EUR7.55 on Thursday.

-By Christopher Emsden, Dow Jones Newswires; +39-06-6976-6921; chris.emsden@dowjones.com

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(END) Dow Jones Newswires

February 18, 2010 03:21 ET (08:21 GMT)

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