Econostrum | Economic News in the Mediterranean



Engie welcomes Veolia's increased offer for its Suez shares

Engie reaches an agreement with Veolia but will delay (photo: Engie)
Engie reaches an agreement with Veolia but will delay (photo: Engie)
FRANCE. On the evening of Wednesday, September 30, 2020, after six hours of discussions and via a press release, the Board of Directors of Engie indicated that it "welcomes" Veolia's offer to buy back a large part of the Suez shares (29.9% out of 32%) that it holds.

This decision comes despite a final move by Suez's Board of Directors, which is opposed to this sale, and especially after a new proposal by Veolia for this share buyback, which has been increased to €3.4 billion compared to €2.9 billion at the end of August 2020.

Nothing is yet final, however. Engie wants to postpone the sale for a few more days, even though Veolia's offer was supposed to have expired at midnight on September 30, 2020. "The Board considered that this new offer meets its expectations in terms of price and social guarantee (...) Given the importance of the stakes for all stakeholders, the Board has decided to ask Veolia to extend the validity of its new offer until October 5, 2020 in order for Veolia to formalize its unconditional commitment not to launch a public tender offer that is not friendly", states a press release from Engie.

Veolia has indeed reached out to Suez by wishing to open a six-month period of discussions to "seek the common basis for an agreement". During this time, Veolia undertakes not to file "a public offer for 70.1% of Suez's capital unless it is friendly".

On Thursday, October 1, 2020, the Ardian fund came to throw a little more uncertainty into this transaction. Supported by the board of directors of Suez, it said it was interested in taking over the 29.9% of Suez shares held by Engie. "Ardian wishes to form a consortium of private and public investors, with a French majority, to carry out this project and launch a friendly public offer", a press release said.
An independent investment company (originally created by Axa under the name Axa Private Equity before being taken over by its employees), the Ardian fund manages and/or advises on $100bn of private investments in Europe.

Frédéric Dubessy

Thursday, October 1st 2020

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