The European Commission yesterday offered a lukewarm response to General Electric's reworked proposal to gain regulatory approval for its $41 billion (€48 billion) takeover of Honeywell.

The US conglomerate is discussing with the Commission the private placement of just under 20 per cent of Gecas, its aircraft leasing arm. Honeywell shares rose sharply as investors reacted to hope that the deal would be approved. But Commission officials do not believe the latest informal suggestion goes far enough to guarantee Gecas's impartiality. They note the stake could be placed with a friendly institution rather than public shareholders.