Veolia CEO Blames Suez for Lack of Talks on Takeover

(Bloomberg) -- Veolia Environnement SA‘s Chief Executive Officer Antoine Frerot blamed Suez SA for the continuing stalemate over his takeover proposal.

The French water and waste utility is offering “a very good price,” and the counterproposal from Suez, which involves two private-equity firms, was only aimed at thwarting Veolia, he said.

Suez on March 21 put forward a solution that would involve Veolia paying 20 euros ($23.5) per share for the utility -- 2 euros more than it has offered -- and selling on more than half of the company to Ardian SAS and Global Infrastructure Partners.

Suez is asking for a “very high price” and wants Veolia to give up some of the company’s most profitable activities, Frerot said at a conference on Tuesday. The offer isn’t compatible with Veolia’s plan and is just an effort to frustrate the bid, showing Suez’s management has no willingness to start talks, he said.

The latest comment suggests there’s little chance of a friendly agreement ahead of Suez’s annual shareholders meeting in May or June. The utilities have been fighting in courts and in the political arena since Veolia announced its plan to take over Suez seven months ago. It bought a 29.9% stake in the company in October, as a first step to a full takeover.

Suez’s proposal is “sincere,” and the company needs to retain a “coherent” scope for what would be the “new Suez,” with assets in France and abroad, CEO Bertrand Camus said on BFM Business radio on Thursday.

Suez gave Veolia until April 20 to negotiate on the basis of its proposed solution, or until May 5 to make a bid for a full takeover at 22.50 euros per share.

Beyond that, a legal mechanism has been put in place that would prevent any buyer from selling Suez’s French water assets until September 2024, something that would complicate Veolia’s ability to resolve antitrust concerns after a deal.

Veolia, which has offered to sell Suez’s French assets to a French investment fund, sees the recent activation of this poison pill as a “blackmail” that forces it to negotiate “with a gun on its head,” Frerot said.

Suez shares were trading virtually unchanged at 18.09 euros at 2:19 p.m. in Paris on Tuesday. They have closed above 18 euros every day since March 19.

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