Gaz de France Afraid To Be Taken Over By E.ON, Centrica

Gaz de France has warned that its sales will be hit if the French government refuses to let it raise gas prices.

French gas giant said it faced a 250 million euro slide in revenues and earnings in the first three months of 2006 because of the price freeze.

Despite higher world energy prices, the French government has blocked Gaz de France from increasing its charges from 1 January.

Shares in the part-privatised firm were down almost 1.5% in Paris trade.

Gaz de France said delays to increases in its charges since November 2004 would cost it a total of 750m euros by the end of the first quarter of 2006, up from an expected drop of 500m by the end of the current year.

Gaz de France intends to improve its finances as it looks to head off the challenge from energy giants such as Germany's E.ON and the UK's Centrica.