Companies. Suez draws a plan B to counter the takeover by Veolia

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After months of research to find out how to avoid being bought out by Veolia, Suez announced on Sunday that the company had received an offer from French funds Ardian and American GIP to find a 'friendly solution' with its competitor who did not receive an immediate end.

The board of directors 'received a letter of intent from Ardian and GIP (Global Infrastructure Partners) aimed at providing a friendly and prompt resolution to the situation arising from the intention to submit an offer from Veolia,' the group said in a press release.

This offering aims to ensure the sustainability of the two French water and waste giants by providing a way out for Veolia.
The letter of intent from Ardian and GIP received from Suez 'paves the way for a comprehensive solution with various possible execution modalities that have an equivalent effect, including an offer to buy Suez shares by investors at a price of EUR 18 per share, coupon attached' Suez said in a press release.

Terms 'to negotiate'

It is clear that the two investors and Suez would offer Veolia in particular to buy back at the same price the 29.9{7d3485657e94c2a51293ca186d4450b2f27c317aa7ee3509dac6c8bbf5461118} of Suezs capital, which it had acquired from Engie in early October. 'The board of directors has asked me to work on alternative solutions and to look for other investors. This is done with this consortium that is ready to support Suez,' defended Bertrand Camus during a telephone interview with journalists.

The terms 'have yet to be negotiated with Veolia if Veolia accepts Suezs outstretched hand,' Camus said, stating that he warned Antoine Frérot, Veolias CEO, shortly before the public announcement of the offer. But Veolia immediately rejected any idea of ​​withdrawing from Suez: 'Veolia reminds tonight that the 29.9{7d3485657e94c2a51293ca186d4450b2f27c317aa7ee3509dac6c8bbf5461118} that it owns in the capital Suez are not for sale and will not be for sale,' replied the group and defended her project to build a 'world champion of ecological transformation'.

The American GIP steps into the case

'Any project that directly or indirectly involves Veolias sale of its stake in Suez or other transfers that distort the industrial project being carried out by the group will be deemed hostile by Veolia,' he added.

If the name Ardian, a leading mutual fund in France, has been around for several months as a possible spoiler for Veolias purposes, the American GIP is a newcomer to the file. This fund, which specializes in infrastructure investments, manages assets in the tens of billions.

Ardian and GIP 'offer a stable shareholder base to support the development of Suez in France and abroad, with constant concern to safeguard the public interest,' the two companies defended in a joint press release.

'Hand outstretched'

According to Bertrand Camus, this Plan B 'has the advantage of ticking a lot of boxes' over and above the maintenance of Suezs autonomy. In particular, according to the press release, it will offer 'the assurance of a majority of French capital with a significant increase in employee ownership'.

This offer 'makes it possible to keep two French leaders in the field of environmental services at a time when the markets are extremely promising (...) in order to safeguard employment and maintain substantial competition, particularly in France', persisted Mr. Camus.

To respond to antitrust laws, Veolia plans to sell Suez Eau France, the heart of its story, to the Meridiam Fund. A project that worries Suez employees and that has been heavily denounced by the management of the group that has been desperately trying to find a way out for weeks.