PARIS (Reuters) – Atos announced on Wednesday the end of discussions with Czech businessman Daniel Kretinsky’s company EP Equity Investment (EPEI) regarding the proposed sale of its Tech Foundations division.
“As part of the exclusive negotiations with EP Equity Investment for the sale of Tech Foundations announced on August 1, 2023, the parties have not reached a satisfactory mutual agreement,” Atos said in a statement.
The two parties therefore “ended by mutual agreement the discussions as well as the put agreement, without any compensation from either side”.
On the Paris Stock Exchange, Atos shares fell by more than 5% in early trading, before offsetting their losses and returning to the green. The stock rose 1.38% to 2.35 euros at 08:38 GMT. It has lost nearly 65% since the start of the year.
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The failure of these negotiations constitutes a first setback in the French strategy of the Czech, who made his fortune in the energy sector and has since invited himself to media operations in French business circles.
Atos and Kretinsky’s EPEI investment vehicle did not suffer financially from the end of the negotiations, the group said. A spokesperson for Daniel Kretinsky declined to comment on the information.
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The abandonment of the project, which was contested by certain Atos shareholders and by political leaders, is also a new example of the setbacks encountered by the French group, in great financial difficulties.
To cope with this, Atos has decided to split its historic IT consulting activities, grouped in the Tech Foundations division, and those in cybersecurity.
At the beginning of August, the group announced the opening of discussions with Daniel Kretinsky for the takeover of Tech Foundations. But the talks came to an end after the appointment of a new president of Atos last October, replacing Bertrand Meunier.
Shortly after taking office, Jean-Pierre Mustier, former chief executive of Italian bank UniCredit, sought to renegotiate the terms of the sale of Tech Foundations in order to obtain more than 500 million euros in additional cash, according to a source close to the file.
The initial plan included the takeover of the company by Daniel Kretinsky for 100 million euros in cash, the transfer of 1.9 billion euros of commitments to the balance sheet and a 7.5% stake in the new company. Eviden, formed with the remaining activities in cybersecurity.
Atos had also planned to transfer hundreds of millions of euros in working capital to Tech Foundations, which sparked the anger of several minority shareholders and strong criticism of the way the planned deal was presented to the markets.
Tech Foundations, loss-making, employs 52,000 people and generates more than half of Atos’ turnover.
The group clarified on Wednesday that it will continue to manage Tech Foundations and Eviden as two separate activities with a coordinated commercial strategy.
Atos, formerly headed by Thierry Breton, is currently negotiating with its banks to ensure its refinancing and is planning asset sales. In particular, he is discussing with Airbus the resumption of its BDS (Big data & security) activity.
The group, which postponed the publication of its annual results until March 20, however reported on Wednesday organic growth in its 2023 turnover of 0.4%, compared to forecasts of between 0.0 and 2.0. %.
Its annual operating margin reached 4.4%, also in line with its objectives of 4 to 5%.
The Tech Foundations subsidiary posted an annual organic decline of 1.7% for an operating margin of 3.1%. Eviden is doing better with organic growth of 1.9% and an operating margin of 5.8%.
(Mathieu Rosemain, Blandine Hénault and Gaëlle Sheehan for the French version, edited by Kate Entringer)
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