This is an opportunity that Suez cannot pass up. The group is preparing to buy back its British subsidiary that it sold to Veolia at the beginning of the year.
“We are working on formulating a takeover bid,” explain several sources close to Suez. The group specialized in water and waste will have to pay 2,400 million euros to match the price that Veolia agreed a month ago with the Macquarie fund.
explanations. Since the spring, the UK competition authority has hinted that it would oppose the takeover of the Suez subsidiary on grounds of dominance. To avoid an outright veto, Veolia signed an agreement with Macquarie to resell these activities to him. Except that Suez has a “right of refusal” on the resale of its former activities. In other words, it can recover its British subsidiary on the condition that it is aligned at the same price as the Australian fund. Suez has until September 22 to exercise this right and present its offer.
Capital increase in Suez
Veolia lucked out by setting a very high amount to fire Suez or force them to pay dearly. Very expensive even because this recovery represents 17 times the margins, a level rarely reached by waste businesses. But the opportunity is unexpected to take over one of the five big countries that Veolia has won (Spain, Chile, the United States, Australia, the United Kingdom) and that weighs 1,000 million euros in turnover. Even at Veolia, Suez is expected to buy its British subsidiary.
Suez CEO Sabrina Soussan is “highly motivated”, according to multiple sources. Her French shareholders too. “Meridian has a very strong appetite,” explains a source close to the fund, which owns 40% of the capital. Caisse des Dépôts, a 20% shareholder, is also in favor of carrying out this very strategic operation for Suez. It remains to be seen whether the US GIP fund (40%) will follow.
Battle between Meridiam and GIP
He “allowed himself to be convinced after hesitating”, explain several sources, one of which assures that “he will not oppose the takeover bid”. But he did not decide how much he would be willing to put on the table. Because to disburse 2,400 million euros, Suez will have to carry out a capital increase of about 1,500 million euros. If GIP is not ready to return its 40% stake, or approximately €600 million, it will be diluted in capital and lose power.
This is the other great challenge of this operation: the French fund “Meridian dreams of taking control of Suez”, explain several sources close to the company. Initially, this was to be the case as part of its deal with Veolia in 2020. But following its takeover bid, the group then led by Antoine Frérot had agreed to make room for the Suez roundtable at its partner GIP, at the same time level as Meridiam. The acquisition of the British activities is also, for him, an opportunity to take revenge.
Source: BFM TV
