(BFM Bourse) – This fund is asking the aircraft manufacturer to abandon its plan to take a 29.9% stake in Evidian, the future Atos subsidiary in which the growing businesses will be housed. The Atos title folds.
Activist funds do not hesitate to express their dissatisfaction when a company takes a direction that does not suit them. Where appropriate with TCI (The Children Investment) and Airbus.
The aeronautics and defense group has entered into non-exclusive discussions with the digital services company Atos with a view to taking 30% of Evidian, a future subsidiary of the tech group which would bring together the growing businesses of Atos ( digital transformation, big data, cybersecurity, supercomputers). Atos intends to distribute 70% of this company during an IPO scheduled for the second half of the year, Airbus therefore wishes to acquire the remaining 30%.
Except that TCI, which holds just over 3% of the capital of Airbus, wrote and sent a letter to the aeronautical group on Monday to express its dissatisfaction. And the fund does not go hand in hand.
A stake that would be valued at…0
TCI therefore asks to immediately abandon the negotiations to take this minority stake. “Evidian is a low-quality, highly leveraged company with 60,000 employees operating in an extremely competitive market. A 29.9% minority stake in Evidian would be an illiquid and distressed asset,” he said. .
The fund argues that this investment would dilute the quality of Airbus’ business, judging that investors would agree to value this stake at…0. TCI stresses that the group would also be exposed to Evidian’s operating losses, its expenses and its financing needs.
This while Airbus can very well continue to maintain fruitful relations with Evidian without becoming a shareholder. “The transaction appears to be a bailout of Atos, a company that is burdened by unsustainable levels of debt and other liabilities,” insists TCI, which sees in the operation “political motivations” pushing Airbus.
The fund wants the former EADS to focus above all on its own operational problems, in particular the resolution of its difficulties in its supply chain which led it to miss its delivery target in 2022. TCI even estimates that the Airbus’ desire to invest in Evidian “raises serious questions about the corporate governance” of the aeronautical group, the fund of which considers the action “extremely undervalued”.
Atos decline
Contacted by BFM Bourse, spokespersons for Atos did not comment. Airbus, for its part, did not make a specific statement on TCI.
“A strategic and technological partnership between Airbus and Evidian would create a win-win situation for both companies, strengthening their respective offerings and positioning in the critical digital and security market segments”, nevertheless argued the company.
“This would allow Airbus to strengthen its digital leadership in the aerospace industry by enabling its long-term digital transformation, strengthen its positioning to support the sovereign needs of European countries for critical digital solutions, and create additional value for its customers and its shareholders. There can be no certainty at this stage that a transaction will take place”, he continued in this statement sent to BFM Bourse.
On the Paris Stock Exchange, the Airbus action is moving up slightly by 0.6% around 3:45 p.m. Atos for its part gives up 4.8% after having already lost 1.2% the day before. “The whole of tech is suffering on Tuesday”, relativizes an analyst “but the fact that an Airbus shareholder disapproves of the operation does not help and increases the risk”, he continues.
TCI, a seasoned activist
Another financial intermediary believes that the exit of TCI “could force Airbus to be more careful about the price it would pay to take 30% of Evidian”. Jefferies for his part, in a comment centered on Airbus, explains that he is part of the “skeptics” camp, and warns that this equity investment “will require a convincing demonstration” of the benefit that Airbus derives from it.
This is not TCI’s first activist campaign. The fund was very critical of the acquisition by the aeronautical equipment manufacturer Safran of Zodiac in 2017, which had the virtue of helping Safran to lower the price paid for this acquisition, as recognized by the Echoes its president, Ross McInnes. More recently the fund pushed Alphabet, Google’s parent company, to tighten costs.
Julien Marion – ©2023 BFM Bourse
Are you following this action?
Receive all information about ATOS in real time: