"Our offer as we proposed it is now null and void," Forgeard said in the interview with the French daily Le Figaro. "Today Tom (Enders, the German co-president) and I need time to reflect on the advice we will give our board. At this juncture, all options remain open."

Thales and Alcatel, the French telecom equipment maker, announced Wednesday that Thales would absorb Alcatel's satellite division Alacatel Alenia Space following a merger between Alcatel and the US telecoms giant Lucent Technologies.

Alcatel is to be paid with 12.1 percent of Thales shares, taking its holding from 9.5 percent to 21.6 percent.

The announcement made no mention of EADS, which had wanted to offer its satellite business Astrium to Thales in exchange for a stake of 15.0-20.0 percent.

Forgeard said he though that "the private interests of one of the parties has prevailed over the industrial project and the European project" -- an apparent reference to Thales, which had sought the bilateral alliance with Alcatel.

"If these private interests had certainly to be taken into account, it is regrettable that the broader general interest had to bow before them," he said, adding that the outcome as "a good occasion lost for Thales, for us and for the construction of a strong defense for Europe at a time of budgetary constraint."

He said that in refusing the EADS offer, Thales had not increased its chances of penetrating the market of Germany, the leading European economic power.

Forgeard gave an upbeat assessment of the activities of his company, which owns the Airbus civil aviation manufacturer, and said that its space activities were developing well and worth "two and a half times those of Thales."

"What I can tell you is that in no case -- yesterday, today or tomorrow -- will we contribute our space activities to a group in which we do not have a significant influence. Space forms part of our bedrock activities," he said, adding that Europe needed a space vocation.

Thales nonetheless left open the possibility of an eventual incorporation of EADS into the new space venture.

"The (Thales) board mandated the chairman to examine ... projects that could be envisaged in to the fields of satellites and defense electronics with other European parties," the company said.

EADS had lobbied hard to be part of the Alcatel-Thales alliance announced Wednesday and had received the backing of President Jacques Chirac.

In the defense field, Forgeard added, "we have a brilliant future with or without Thales," and said his company was more important in this sector than Thales is.

Forgeard declined to comment on the news that two of the main shareholders in the company, German-US automaker DaimlerChrysler and French defense and media group Lagardere, were to cut their holdings substantially.

DaimlerChrysler's interest is to be reduced from 30.0 percent to 22.5 percent while that of Lagardere will be lowered from 15.0 to 7.5 percent. Both groups said they were reducing their holdings in order to concentrate on their core activities, automobiles for DaimlerChrysler and the media for Lagardere.

France's La Tribune reports in its Friday edition that DaimlerChrysler was holding negotiations with the German bank KFW on selling the 7.5 percent stake for "around two billion euros".

The paper said both DaimlerChrysler and Lagardere could both cut their stakes to six percent without losing any influence due to company regulations in the Netherlands, where EADS is incorporated.

Forgeard said EADS had registered "very many requests" from others, particularly European investors, wanting to buy into the company.

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