Candidates are multiplying to buy Suez subsidiaries

Several investment and industrial funds are preparing for Veolia’s takeover bid. An alternative offer on Suez remains unlikely, they aim to recover the activities of Suez that Veolia will have to sell.

Everyone rushes to Suez. The group is trying to unite around it several investors capable of setting up an alternative offer to the one that Veolia has promised to launch. Suez’s objective is therefore to make another offer so that its shareholders can decide between Veolia and the project supported by its management.

In addition to Ardian and Antin, already present in September, the Canadian fund Brookefields would be in the ranks, as well as the sovereign fund of Abu Dhabi, Mubadala. On the other hand, that of Singapore GIC, which was in the game in September, has not returned, for the moment.

All the major international infrastructure funds are looking at the file, “says a source.

For the moment, all are waiting. The CEO of Veolia, Antoine Frérot, assured at the beginning of November that he would launch his takeover bid “whatever happens”. In the meantime, all of these investors remain very cautious. “We want a peaceful climate between Suez and Veolia and that not everyone comes out on top,” explains the boss of one of these funds.

Ardian’s boss, Dominique Senequier, has always set the line not to participate in a stock market battle. “We must first resolve our problems with Veolia, concedes a person close to Suez. And it is not won”.

The tension remains very strong between the two groups. For the moment, Veolia has no rights at Suez due to the suspension of the buyout of their 29.9% share by the courts. The appeal decision will be made this Thursday. “If Veolia recovers its voting rights, it’s over,” admits this close to Suez.

Buy back a “small” Suez

Several scenarios are under study. First an offer for 100% of the capital of Suez. A month ago already, before Veolia became the first shareholder of Suez, Ardian was ready to offer a price of 18.5 or even 19 euros per share. An amount greater than that of 18 euros that Veolia finally paid Engie to buy back its stake in Suez. Today, the situation has changed: the road is narrow to present a global offer without being hostile to Veolia, while the group led by Antoine Frérot now owns 29.9% of Suez.

Ardian will never stand in the way of Veolia, confirms a good connoisseur of the file. It seeks to recover the activities sold for reasons of competition “.

All these funds are also intended to invite themselves to the negotiating table with Suez and Veolia to recover assets that will have to be sold to avoid a veto from the competition authorities. This was already the idea of ​​Ardian’s engagement at the end of September. At the time, Veolia was ready to resell a perimeter of 5 billion euros in turnover.

According to several sources, Ardian is targeting all of Suez Eau France as well as subsidiaries abroad in water that Veolia will not be able to keep. A “small” Suez refocused on water: regulated activities and therefore with recurring and predictable revenues, essential to the financing model of investment funds. This concerns, for example, activities in Great Britain or Hong Kong. Ardian is also eyeing some larger activities such as the United States, Chile and Spain.

Paprec in the starting blocks

Suez would also seek to keep its waste activities in France. Although Ardian never really took an interest in it. They are already coveted by an industrial player: Paprec. According to our information, the group founded by Jean-Luc Petithuguenin is also preparing several scenarios to propose to buy all or part of Suez’s waste activities in France that the competition authority will force to resell.

These are mainly the incinerators of Sita, the subsidiary of Suez, or the hazardous waste activities. These are also of interest to the Séché group. Still in waste, Veolia could also have to sell Suez activities in Morocco, Great Britain or Australia.

A link with the sale of Photonis?

These funds have little room for maneuver even if they continue to play their game. Several sources however question the dual interest of Ardian. The government encouraged, even pushed, according to some, Ardian to enter the game to propose an alternative takeover of Suez to Veolia, in mid-September.

At the same time, the Ministry of the Economy refused to allow Ardian to sell Photonis, a company in the defense sector, to the American Teledyne. A decision that angered the boss of Ardian Dominique Senequier. Before, without explanation, the sale of Photonis was relaunched a few days later.

Many are surprised at the consistency of the two processes. “Ardian asked Bercy to release the sale of Photonis in exchange for its commitment to Suez”, believe several sources. A scenario formally denied by Ardian. Where Bercy ensures that it is “Teledyne which stopped the negotiations before returning. The conditions of the government have not changed”. A very revealing example of the meanders that the Veolia-Suez case is taking.