GDF said it would consider its different options regarding International Power, including the possibility of withdrawing its proposed offer.
The statement came less than an hour after International Power said an independent committee appointed by its board had rejected the 390 pence-per-share offer tabled by GDF last week.
As of 10.28 a.m. British Time, International Power shares were down 0.3 percent at 402 pence, while shares in GDF were 1.2 percent lower at 18.81 euros.
London-based Deutsche Bank analyst Martin Brough said in a note to investors that the offer rejection did not change his view that an agreement will eventually be reached.
GDF will end up paying close to 420 pence for each of the outstanding shares, Brough predicted. We see this as a reasonable premium, he added.
The French company's bid had valued International Power at 19.9 billion pounds, only slightly above its market valuation immediately before the offer.
The International Power committee unanimously concluded that the indicative proposal of 390 pence per share undervalues IPR, the company said.
In their brief statement, the company's independent directors also noted that under UK takeover rules GDF was barred from making an offer without their approval before August 3.
(Reporting by Laurence Frost and Paul Hoskins; Editing by Greg Mahlich)