The gendarme of the Bourse blew his whistle. The Autorité des marchés financiers (AMF) took a stand on Friday April 2 against the system put in place by Suez to counter the takeover bid by Veolia. The besieged environmental giant immediately reacted by denouncing “An incomprehensible stance that once again favors Veolia”. In the attacker’s camp, on the other hand, satisfaction was required even if, at this stage, the AMF did not accompany its communication with any injunction.
What are the reproaches of the stock market policeman? To understand, it must be remembered that the defense of Suez is largely based on the existence of a foundation under Dutch law, created in September 2020 in order to make Suez Eau France inalienable. Claimed objective: to hamper Veolia which, in the event of its successful takeover bid, has planned to sell this activity to comply with competition rules.
Distorted bidding and bidding game
Veolia, of course, was quick to challenge the legitimacy of this foundation. The group led by Antoine Frérot has filed an appeal with the commercial court as part of a procedure that will take several months. For its part, the AMF had found nothing to complain about against this “poison pill” so far. But Suez went a step further.
On March 21, the company announced that it was activating this foundation until 2024 and that only two events could allow it to be dissolved by then: the first, that an agreement be reached with Veolia by the 20 April; the second, that a public offer be filed at a price of 22.50 euros before May 5. Above all, the board of directors specified the contours of an agreement: he said he was ready to recommend an offer at 20 euros per share (instead of 18 euros) from his rival if the latter agreed to sell a large section of Suez to a consortium bringing together the Ardian and GIP investment funds. The latter want to buy 55% of Suez (including Suez Eau France), for a turnover of around 9.1 billion euros.
Suez then spoke of “Hand extended to Veolia” but for the AMF, this hand turns out to be more extended to Ardian-GIP than to Veolia because the foundation appears, on the one hand, deactivated for Ardian-GIP while it would only be in “Limiting and constrained cases” for Veolia. What distort the free play of offers and bidding. “The changes that the Suez company has made to the foundation’s mechanism under Dutch law, combined with the support for the Ardian-GIP consortium’s proposal negotiated by the board of directors, undermine the rules and guiding principles applicable to public offers”, specifies the Authority.
You have 40.94% of this article left to read. The rest is for subscribers only.