Posted on Nov 19, 2020 at 7:17 PMUpdated Nov 19, 2020, 7:53 PM
Veolia has just won a round in its merger project with Suez. In a decision that fell Thursday at the end of the day, the Nanterre commercial court, which it had seized on Monday for interim relief, orders Suez not to irrevocably activate the foundation under Dutch law preventing the sale of its subsidiary Eau France before the holding of a general meeting allowing shareholders to vote on this foundation.
The latter constitutes the main obstacle blocking a takeover bid by Veolia, because its takeover of Suez could not obtain the green light from the antitrust if the sale of Suez Eau France could not be carried out. It is today this poison pill that is threatened.
Precautionary measure
In the order issued this Thursday by the Commercial Court of Nanterre, the judge “forbids the Suez SA company to take any decision likely to […] lead to the irrevocability of the legal system at the center of which is a foundation in the Netherlands, set up on September 23 by its board of directors, until the outcome […] a next general meeting of Suez SA, called to rule on the said legal arrangement and its consequences, and at the latest until the ordinary general meeting ”to be held by June 30, 2021.
This is a precautionary measure, on condition that Veolia initiates legal action on the merits within a fortnight, which it will do by requesting the nullity of the resolution of the Suez council that created the foundation. The judgment on the merits is expected within six to nine months.
Deactivate the foundation
Before that, as part of this action, Veolia hopes to be able to obtain from the judge the documents necessary to understand how to deactivate the foundation, namely the deliberation of the Suez board that created it, and the non-public agreement between Suez and the foundation to activate its irrevocability.
Veolia is confident in its ability to recover in February the voting rights corresponding to the 29.9% of Suez it holds, which are currently frozen, and to be able to vote at the Suez AGM on a change in the composition of the board . A renewed management team could indeed be less hostile to its merger project, but it will be necessary to vote that it obtains a prior agreement from the European Commission, Suez being its competitor.
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