Veolia raises stakes in French water wars with hostile Suez bid
PARIS (Reuters) – French waste and water management firm Veolia vowed on Monday to press ahead with its bid for smaller rival Suez despite new legal hurdles and a government warning over the increasingly hostile takeover battle.
The standoff between the two historic competitors and heirs to 19th century water companies that have become global firms has descended into a series of tit-for-tat manoeuvres as Suez tries to fend off Veolia.
Veolia, which has argued that merging would better equip the companies to face rivals emerging in China, upped the ante again on Sunday after rowing back on a pledge to only make a move with a green light from the Suez board.
Veolia said on Sunday it was offering 18 euros per share for the 70% of Suez it does not own, valuing it at 11.3 billion euros ($13.6 billion), adding that Suez had resisted all attempts to engage.
“We maintain that our deposited offer is valid,” Veolia Chief Executive Antoine Frerot told reporters on Monday, adding that it was up to the French market regulator, the AMF, to make a ruling on the offer.
Suez shares were little changed at 17.25 euros at 1110 GMT while Veolia was down 0.4%.
French Finance Minister Bruno Le Maire on Monday slammed the move as an unfriendly manoeuvre and told Europe 1 radio that he would ask the AMF to examine Veolia’s offer.
“This offer breaches commitments made several times by Veolia,” Le Maire said, adding he did not want a destructive all-out war between the French companies.
Veolia bought its 29.9% stake in Suez stake in October from Engie, a utility that counts the French government as a top shareholder.
The state asked Veolia at the time to keep its approach friendly, though one small shareholder association in France, whose members includes investors in both companies, said on Monday that it was not the government’s job to intervene.
Suez has resisted Veolia’s approaches, citing fears of job losses, and has backed alternative suitors, including a potential offer involving private equity firm Ardian.
Responding to Veolia’s latest move, Suez said on Monday that a court has ordered Veolia not to launch a full takeover offer for Suez without the green light from its board.
Veolia said it had launched the offer – its first attempt to launch a full takeover – before receiving the court order.
Reaching the stage where Suez investors can tender their shares may yet take months, however, with more legal hurdles, management tussles as well as talks with antitrust regulators in Brussels set to run their course.
Suez’s annual shareholder meeting in the spring may mark the next tipping point, as Veolia may make a move against Suez’s management, unless the firms can come to an agreement by then.
(This story has been refiled to fix typo in paragraph two)
($1 = 0.8310 euros)
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