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UPDATE 1-Engie calls Thursday board meeting to review Suez options - sources

(Recasts, adds board meeting date)

PARIS/MADRID, Sept 15 (Reuters) - Engie’s board of directors is set to meet on Thursday to discuss Veolia’s bid for its 29.9% stake in Suez, with the clock ticking for the French waste and water management group to come up with a counter-plan, sources told Reuters.

Suez management sees Veolia’s bid plan as hostile and is working on finding an alternative solution that could see a consortium of financial investors make a rival bid for Engie’s stake.

The Engie stake deal will be a decisive moment for the fate of Suez, as Veolia has expressed interest in taking full control of the French utility firm after becoming its leading investor.

Engie’s board will discuss a range of its options on Thursday, two sources familiar with the matter said.

Engie, led by chairman Jean-Pierre Clamadieu, owns close to 32% of Suez and is keen to cash out, but has rejected Veolia’s bid for a slice of that stake amounting to 29.9% of the firm as too low.

Suez’ board is also meeting on Tuesday as it seeks to work out a response to Veolia’s takeover plan, two other sources said, without specifying whether a counter-offer would be discussed.

Spain’s Criteria, the parent company of Caixabank, ranks as Suez’s second biggest shareholder with a 5.9% stake and is currently in wait-and-see mode, another source said.

He added Criteria has no plans to take part in any bidding consortium for Engie’s stake, and ruled out the Spanish investment firm playing any active role in trying to help Suez fend off Veolia’s bid approach.

Criteria is wholly owned by the foundation of former savings bank La Caixa, and in turn holds 40% of Caixabank, currently in merger talks with Bankia..

Representatives at Suez, Engie and Criteria all declined to comment. (Reporting by Benjamin Mallet in Paris and Jesus Aguado in Madrid; Writing by Pamela Barbaglia and Maya Nikolaeva; Editing by David Evans and Jan Harvey)

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