Twist: the champion of water and waste Veolia moved up a gear on Sunday by putting nearly 8 billion euros on the table in order to acquire Suez, renouncing the friendly nature of the takeover attempt of its competitor, after months of unsuccessful attempts.
Seized Sunday evening by Suez, the commercial court of Nanterre ordered Monday, February 8, to Veolia to suspend the launch of any takeover bid (OPA) against its competitor, pending a substantive debate on its previous friendly commitments. The court orders Veolia “Not to make the Autorité des marchés financiers the recipient of a proposed public offer or to initiate a public offer on Suez securities not previously approved by the Suez board of directors”, specifies the summary decision.
In the meantime, Veolia had formally submitted its offer to the AMF at 7 a.m. It is now suspended by the court decision. Suez will, for its part, issue a summons known as “Promptly” in Veolia, with a view to a first hearing on February 18, adds the Nanterre court. This hearing will be followed by exchanges of written submissions between the parties, the procedure which may take from one to three months.
“Termination of engagement”
The Minister of the Economy, Bruno Le Maire, announced Monday that the gendarme of the Paris Bourse was going to be seized. “This offer is not friendly, and it contravenes the commitments that have been made on several occasions by Veolia. It also raises questions of transparency. Why was this offer suddenly made? So, we are going to refer the matter to the Autorité des marchés financiers this morning ”, said Mr Le Maire on Europe 1.
In a brief statement published on Sunday evening, Veolia – which in October bought 29.9% of the capital of its big French competitor Suez – found that “His repeated attempts at friendliness, reiterated in his offer proposal of January 7, 2021, have all come up against opposition” of its target. Faced with Suez’s intransigence, Veolia’s board of directors has therefore announced its decision to launch a takeover bid at a price of 18 euros per share, out of the 70.1% of the capital that it does not hold, i.e. a transaction amounting to € 7.9 billion in cash.
“Veolia is legally unable to file a takeover bid”, had reacted in the wake of a spokesperson for Suez, denouncing a “Termination of the friendship commitment” taken by Veolia. “We will not let Veolia take its course in its destruction enterprise”, said the Suez Inter-Union (CGT, FO, CFDT, CFTC, CFE-CGC) “Hostile takeover bid against Suez and its employees”, synonym of “Declaration of war without return”.
Fear of a “dismantling” of Suez activities
In an increasingly sustained and competitive global market, Veolia wants to create a “French super champion” of the sector. The group cut its cards at the end of August, when a month earlier its shareholder Engie had said “Open” on the disposal of its 29.9% in Suez.
But for months, Suez has been shouting “Dismantling”, invoking its own potential, its strategic plan, its disposals to enable it to acquire cutting-edge activities. For its managing director, Bertrand Camus, this takeover would be “An alchemy in reverse, to transform gold into lead”. For their part, elected officials expressed strong fears about the consequences of the project, on the price of water, the maintenance of competition, investment and employment.
In mid-January, Suez counterattacked by announcing an offer from French funds Ardian and American GIP, to achieve a “Friendly solution” with Veolia: but the latter immediately sent a notice of disqualification.
However, the dialogue seemed to have resumed recently: the two groups were to start talking to each other. “Very, very soon”, Philippe Varin told AFP on Wednesday. And the day before the Minister of the Economy, Bruno Le Maire, considered that an amicable solution was ” at hand “.
Door closed
Friday, Antoine Frérot and Bertrand Camus even met, according to a source close to the file. But the door slammed shut.
“Suez has multiplied over the past four months the actions intended to obstruct Veolia’s offer proposal”, was justified this last Sunday evening. These actions “Found their outcome in the declarations of Suez, Ardian and GIP of January 17 indicating an alternative offer from the latter and the decision of the board of directors of Suez” to support this offer. Lashing out “Ambiguous maneuvers and statements by Suez, Ardian and GIP”, Veolia has therefore decided to “Submit a formal offer, to be able to enter into discussion” with its target.
After its initial support for the buyout project by Veolia, the state seemed to distance itself in recent weeks and called instead for dialogue.
–
