French utility Veolia will increment the price of its proposal to purchase 29.9% of Engie’s stake in its rival Suez. Antoine Frérot, CEO of Veolia, said the company had the financial strength to do so, reports Reuters.
Veolia on Monday confirmed that Engie having canceled its board of directors scheduled on September 25, will submit its improved offer no later than September 30. The price increase was not specified.
Last month, Veolia had surprised Engie and Suez with a 2.9 billion euros proposal for a 29.9% stake in Suez from French electric utility Engie. If the offer is approved, Veolia intends to file a voluntary tender offer for the remaining Suez shares.
Frérot told journalists on Friday that Veolia would not ask for a seat on Suez’ board if Engie accepts the new proposal.
Suez considers Veolia’s offer hostile and is working on a counterproposal by looking for a consortium of investors to place a higher bid for Engie’s stake.
In a recent press release, Suez states that it is: “perfectly able to co-establish with Engie a solution that would be satisfactory for Engie and in the corporate interest of SUEZ. This solution should respect the interest of all shareholders, employees, clients, and all stakeholders. Such operation could also create the opportunity to double SUEZ’ employee share ownership.”
SUEZ has asked Engie to set up a suitable timeline for discussions.
The company has also set up a foundation to protect Suez Eau France that Veolia wishes to sell to Meridiam Infrastructure.
“The Board of Directors reached the following decision: a foundation managed by a majority of representatives or former representatives of SUEZ’s employees, has the mission to preserve, in the interest of SUEZ, the integrity of the French Water activity within the SUEZ group. For the next four years and unless otherwise decided by the Board of Directors of SUEZ during this period, SUEZ Eau France, as well as its assets, will be non-transferable in the absence of a prior approval of the SUEZ Eau France shareholders under certain conditions, and in any case, the foundation’s prior approval.”
According to Reuters, Frérot said he was hoping to find a way to fend off the foundation that Suez announced.