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January 21, 2021

Veolia ready to start constructive dialogue with SUEZ

Veolia has welcomed the SUEZ board’s call to initiate dialogue regarding a potential merger, while calling on Ardian to urgently clarify the misleading communications issued to the market on 17th January.


Commenting on the latest developments, Antoine Frérot said: "I am delighted to open a dialogue with Bertrand Camus, as mandated by the SUEZ Board, within the framework of the project that I sent them on January 7th. We welcome this development and look forward to engage constructively away from the legal battlefield, as we have tried to do since we completed our acquisition of a 29.9% stake in October to become SUEZ’s largest shareholder.


“Our offer has now been laid out in full and our intentions have been clear from day one.  On behalf of all SUEZ shareholders, we are seeking the urgent clarification of the misleading public financial communications issued by SUEZ, Ardian and GIP.”


On the evening of Sunday 17th January, SUEZ, Ardian and GIP issued press releases suggesting a formal alternative offer was being announced. This story was covered widely by both French and International media.


The true nature of the situation only emerged once Mathias Burghardt, head of Ardian Infrastructure, was interviewed by the AFP, and confirmed that their letter of intent was not a counter-offer and was fully dependent on an agreement between Veolia and SUEZ.


It was left therefore for Veolia to clarify the situation by confirming that its 29.9% stake in SUEZ is not and will not be for sale given that it constitutes “the first step in the creation of a world champion of ecological transformation”.


In line with our continued effort for a transparent and straightforward process since August 2020, Veolia sent a formal letter to Ardian and GIP expressing Veolia’s “serious concern about the harmful consequences of the misleading, or at least imprecise, public financial communication” on 17th January as well as wider market speculation since Veolia is SUEZ largest shareholder with a holding of 29.9%.


Leading international financial commentator Reuters Breakingviews wrote on the latest developments, criticising the lack of detail and synergies in the proposed “compromise involving investments by infrastructure funds”. Columnist Christopher Thompson said: “It’s hard to see why Veolia – which immediately declared its own shareholding in Suez was not for sale – would agree to such a compromise. Anything less than a takeover would fall far short of Frérot’s stated goal of creating “a world champion of ecological transformation”. Second, the company’s indicative bid, worth 18 euros per Suez share, is bolstered by the prospect of 500 million euros in annual cost savings. Ardian and GIP spelled out no comparable benefits.”


Read the full article here - https://www.breakingviews.com/considered-view/leaky-suez-defence-only-enhances-takeover-appeal/ (Subscription or free trial required)