Suez Shares Jump As Veolia Plans EUR2.9 Billion Stake Purchase, Eyes Takeover
By Giulia Petroni
French water and waste management company Suez SA's shares
jumped on Monday after Veolia Environnement SA made a cash offer to
acquire a 29.9% stake in the company for 2.91 billion euros ($3.45
billion) as a step toward a potential takeover.
Veolia said Sunday that it is offering to buy the stake from
energy company Engie SA in Suez at a price of EUR15.50 a share in
cash. If the offer is accepted, Veolia would formally bid for the
remaining shares in its utility rival.
At 0811 GMT, Suez traded 19% higher at EUR14.57 a share.
Veolia's shares traded 3.3% higher.
Suez said the approach wasn't solicited and it will convene its
board to discuss the approach. Engie owned a 32.1% stake in Suez as
of the end of 2019. Other major investors include the investment
company of Spain's La Caixa banking foundation.
Engie shares rose 5.6% to EUR11.76.
"The offer is surprising since it is not in line with the
strategic plan/M&A strategy presented by Veolia in late
February," says Bryan Garnier. "We understand the rationale behind
creating a global champion with multiple synergies but a lot of
work needs to be done [in terms of] antitrust, financing,
Veolia said if it acquired Suez it would sell off its French
water arm Meridiam, and has already identified an acquirer. It
estimate the possible cost savings to be achieved from the
combination at EUR500 million.
"This historic opportunity will enable us to build the French
world champion in ecological transformation, while accelerating
international development and strengthening the new entity's
capacity for innovation. This project is part of a friendly
approach, as we share the same businesses, corporate culture and
values with Suez," Veolia Chief Executive Antoine Frerot said.
Write to Giulia Petroni at firstname.lastname@example.org
(END) Dow Jones Newswires
August 31, 2020 04:38 ET (08:38 GMT)
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