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18 January 2021 By Christopher Thompson

Suez’s latest leaky defence only serves to make its would-be acquirer look cleaner. In an attempt to fend off a takeover by rival Veolia, the $13 billion French waste company is touting a possible compromise involving investments by infrastructure funds. Scant detail and a lack of synergies ups the chances of boss Bertrand Camus eventually getting drenched.

Suez has been resisting a possible 11.3 billion euro takeover by Veolia since August. On Sunday, it appeared to buckle when Camus said he would open discussions with Veolia CEO Antoine Frérot, who already owns 29.9% of his waste-to-water competitor. Details are scant, but one alternative could involve Gallic fund Ardian buying a stake in Suez along with New York-based Global Infrastructure Partners.

Such an “amicable solution” – in Camus’s words – would reinforce the two French companies’ respective leadership positions in environmental services. It would also have the backing of the Suez board, which has thrown up barriers to Veolia after Frérot pledged not to make a hostile bid.

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.

Unless Ardian and GIP make a formal counteroffer, there is little pressure on Frérot to raise his current bid. To prevail, however, he needs the Suez board to reverse a poison pill mechanism which effectively transferred ownership of the company’s French water business to a non-profit foundation.

That means Frérot may have to wait until Suez’s annual meeting later this year, when he can ask shareholders to replace Camus and the rest of the board. Investors preferring the certainty and relative simplicity of a cash offer should give him a strong hand. But they will have to wait a while longer for this water fight to end.


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