PARIS (Reuters) - French commercial property group Gecina said on Tuesday it would maintain its offer worth at least 1.5 billion euros (1.1 billion pounds) for Fonciere de Paris (FdP) after the company's biggest shareholder backed a lower rival bid.
Insurance company Covea, a French insurer that holds about 30 percent of FdP, said it preferred property group Eurosic's bid over the 10 percent higher cash offer from Gecina. Covea also holds a near-22 percent stake in Eurosic.
The struggle for FdP comes as yield-starved investors have been piling into the Paris commercial property market, pushing investment volumes past 20 billion euros last year, their highest since before the 2008 financial crisis.
Gecina Chairman Bernard Michel said neither a withdrawal or an increase in its offer was being considered after Covea's announcement.
"We will continue to do everything we can to convince all Fonciere de Paris shareholders to choose our offer," Michel told Reuters in an interview.
The rival bidders have both tabled alternative offers in shares, valued at a small premium to the all-cash terms.
Gecina, which recently sold its healthcare facilities for 1.35 billion euros to focus on office space in the French capital, has said its portfolio would be a good fit for FdP's central Paris holdings.
The FdP supervisory board is scheduled to meet this week, Michel said, adding that he was surprised by Covea's position.
"(Covea) seems to be ignoring our offer in stock ... which would give them an opportunity to become a major shareholder of the new group," he said.
Reporting by Mathieu Protard and Maya Nikolaeva; editing by Leigh Thomas and Laurence Frost