Suez Seeks $61 Million Daily Fine Until Veolia Withdraws Bid
(Bloomberg) -- Suez SA asked French judges to impose a daily fine of 50 million euros ($61 million) if Veolia Environnement SA doesn’t withdraw its hostile takeover offer.
Suez lawyer Bruno Cavalié told a court outside Paris Tuesday that Veolia deliberately ignored a ruling from last week that ordered the company to temporarily hold off on any takeover bid that didn’t have the approval of Suez’s board.
“Veolia deliberately transgressed the ruling,” Cavalié said at the hearing at the Commercial Court of Nanterre. He said the withdrawal is needed as Veolia shouldn’t have been allowed to file the offer after repeatedly pledging not to make a hostile bid.
The case is the latest legal skirmish as Suez fights Veolia’s bid to create a world leader in waste and water services. After months of being rebuffed by Suez’s management, Veolia escalated the tension with its rival last week by making a hostile takeover offer for the French utility.
During the Tuesday hearing, attorneys on each side disagreed on pretty much every single point.
Lawyers for Veolia argued that Suez obtained the Feb. 8 emergency ruling under false pretenses. Contradicting what Suez’s defense team told the court, Veolia lawyer Jean-Yves Garaud said the company never made any binding commitments -- simply a declaration of intent -- that prohibited a hostile takeover.
Garaud also considers that the Nanterre court shouldn’t encroach on the prerogatives of France’s stock-market regulator, which is set to examine whether Veolia acted in good faith as part of its upcoming decision on the validity of the takeover offer.
The Nanterre court will on Feb. 23 issue a ruling on whether it has the jurisdiction to examine Suez’s request and on Veolia’s demand to overturn the Feb. 8 decision, according to Jacques Fineschi, the tribunal’s president.
The two rivals also sparred over whether the head of the stock-market regulator asked Veolia to withdraw its bid, with Suez lawyers reading out a text message received by the company’s Chief Executive Officer, Philippe Varin.
“After analysis, we have registered the filing after confirmation from Veolia that it did not wish to withdraw it following the ruling,” Robert Ophèle, chairman of the Autorité des Marchés Financiers, told Varin on Feb. 8, according to Cavalié.
Veolia lawyers claimed the text message was taken out of context and said that the takeover offer, once filed, was irrevocable. AMF representatives declined to comment on the exchange.
At the end of the hearing, Fineschi urged both sides to find common ground with the help of mediators. While Veolia’s lawyers said they needed to ask their client to reflect on the matter, Cavalié said Suez is considering asking banker David de Rothschild to act as an intermediary.
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