Suez's response against Veolia breaks the rules, denounces the AMF
By Challenges.fr on 04/02/2021 at 2:49 p.m.
3 min read
The response initiated by Suez to thwart the takeover offer of its rival Veolia does not respect the rules applicable to public offers, said Friday the financial markets authority (AMF), inflicting a setback on the specialist in the management of the water and waste.
The response initiated by Suez to thwart the takeover offer of its rival Veolia does not respect the rules applicable to public offers, said Friday the financial markets authority (AMF), inflicting a setback on the specialist in the management of the water and waste.
Veolia, which in October became Suez's largest shareholder after buying a 29.9% stake from Engie, has been seeking for several months to take control of its rival, but the latter fiercely opposes it. The group led by Antoine Frérot has filed an offer on the balance of Suez capital at a price of 18.00 euros per share and intends to defend its project within the framework of the next general meeting of its rival which must be convened by end of June.
To defend itself, Suez recently made final until September 2024 a foundation under Dutch law preventing the sale of its water activities in France, effectively blocking the completion of the Veolia project which has planned to sell them for reasons competition. The group led by Bertrand Camus also proposed to initiate discussions with Veolia with a view to finding a compromise solution on the basis of a proposal from the Ardian-GIP consortium of funds which plans to take over a large part of the group's activities for 11.9 billion euros. Veolia immediately rejected this proposal, which it described as a "phantom offer".
AMF opinion strengthens Veolia
"The search for a negotiated solution between the parties is quite legitimate but it must respect the principles of transparency and integrity of the market, loyalty in transactions and competition, as well as the free play of offers and their bidding, "said the policeman of the Stock Exchange in a press release. "The combination between the changes that the Suez company announces to have made to the foundation's mechanism under Dutch law and the Ardian-GIP consortium's proposal negotiated and supported by the Suez board of directors undermines the rules and guiding principles applicable to the offers public ”, adds the AMF.
In its communication, the authority considers in particular that the Ardian-GIP consortium - which explained that its proposal did not constitute a counter-offer - "is in fact placed, with the support of the company targeted by the offer, which granted it an exclusive commitment, in a situation of competition with the company Veolia ". The AMF also considers that the valuation of 20 euros per share mentioned in the consortium's proposal "does not correspond, in reality, to a price or a value that the shareholders of Suez would be able to receive", that this information "does not not contribute to the correct information of investors "and that the foundation created by Suez could only be deactivated" in limiting and constrained cases ".
Contacted, Suez declined to comment immediately. The AMF's communication could give weight to the arguments of Veolia, which has taken legal action to cancel the foundation created by Suez. The stock market policeman will soon give his opinion on the compliance of the public offer launched by Veolia.