(BFM Bourse) – The French State has submitted a non-binding offer to buy activities posing a challenge to national sovereignty for a company value ranging from 700 million to 1 billion euros. At the same time, the group increased its liquidity needs by 600 million euros.
The State takes out the checkbook to perpetuate the sovereign activities of Atos. The Minister of the Economy, Bruno Le Maire, warned on Sunday evening on LCI.
“There are in Atos a certain number of activities which are strategic for the French nation, for sovereignty, for defense, in terms of cybersecurity, supercomputers, nuclear power. These sovereign activities must remain under the exclusive control of the France”, declared the tenant of Bercy. Bruno Le Maire then announced that he had submitted, via the State Holdings Agency, a letter of intent with a view to acquiring “all the sovereignty activities of Atos”. The political leader specified that other “French sovereign actors” would support the State in this project.
Atos confirmed this Monday morning that it had received an offer for these activities, which include cybersecurity products, the “mission critical systems” division which provides advanced electronic systems to the aeronautics, space and defense sectors, and the “mission critical systems” business. advanced computing”, with supercomputers.
The digital services company indicates that the State’s offer is based on a business value (i.e. including debt) of 700 million euros to 1.1 billion euros. The scope also represents around 1 billion euros in revenue, or 66% of Atos’ BDS division, that is to say big data, supercomputers and cybersecurity.
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Cash requirements revised upwards
“The group welcomes with satisfaction this letter of intent which would protect the strategic imperatives of sovereignty of the French State. The due diligence phase with the French State would begin shortly, with a view to issuing a non-binding confirmatory offer by early June 2024,” Atos announced.
The French State’s decision comes just as Atos significantly increased its liquidity needs for the period 2024-2025, estimating this Monday a total of 1.7 billion euros compared to 1.2 billion euros. This previous forecast lasted barely two weeks…
The group estimates that it now needs 1.1 billion euros of liquidity in the form of debt and/or capital compared to 600 million euros previously.
To give itself more flexibility, the company also intends to obtain 300 million euros in additional revolving credit lines as well as 300 million euros in bank guarantee lines. So a total of 1.7 billion euros.
In addition, Atos has indicated that it wants to reduce its gross debt by 3.2 billion euros by 2026 compared to 2.4 billion euros previously, so as to regain a “BB” credit rating at this maturity.
Massive dilution to come
On the Paris Stock Exchange, Atos shares jumped 16.4% around 10 a.m. “The market reaction is quite logical. The group had warned last week that it would increase its financing needs. Ultimately, the transfer of activities to the State, which should be quickly finalized, allows at least to compensate for the need for additional financing, even if we do not yet know whether there will be debt in the enterprise value communicated by the company”, observes a financial intermediary.
“In addition, the State will probably recover relatively low-margin activities and the banks will probably view this sale favorably,” he adds.
Remember that Atos is most likely heading towards a significant capital increase. “The reduction of Atos’ gross debt will necessarily involve the conversion of debt into capital. We do not know exactly the extent because the group has given a general framework and is now awaiting proposals. But the dilution will be in all huge case”, Nicolas David, analyst at Oddo BHF, explained to BFM Bourse at the beginning of April.
The group itself warned that “given the needs of the group, a global refinancing agreement will result in significant dilution of existing shareholders”.
However, we can cite Société Générale’s price objective to prepare. The La Défense bank has set a target of 20 cents, more than ten times less than the current share price.
Julien Marion – ©2024 BFM Bourse
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