The French utility Engie has rejected Veolia's initial offer for a nearly 30 per cent stake in rival Suez. Veolia had planned to pay around €3bn for the shares in the first stage of a two-step plan to acquire full ownership of Suez. However since the announcement of Veolia's offer on 30 August, Engie had signalled that the figure proposed by Veolia was too low. According Engie, its board of directors officially decided on Thursday that Veolia's offer "cannot be accepted under its proposed terms". That offer is valid until 30 September.
Instead the board had given a mandate to its chairman Jean-Pierre Clamadieu and to the concern's interim CEO Claire Waysand to conduct further negotiations with Veolia in order to seek improved terms. Engie was also keen to receive assurances from Veolia "with regards to the quality of the industrial project and the due care towards the stakeholders"
Veolia's proposal would see it sell off the large part of Suez's French water activities to the investment firm Meridiam. There have been concerns raised about potential job losses resulting from such a sale and about the long-term viability of those activities under the management of an investment firm.
Engie open to Suez offer sent "in the next few days"
Engie's board also noted that there were on-going exchanges between the utility company and Suez, but that "to date, no alternative proposal has been submitted". However, the door had not yet been closed on a Suez approach. Engie's board had also authorised Mr Clamadieu and Ms Waysand continue the exchanges with Suez "and to study any alternative offer to be sent to Engie in the next few days," said the utility company in its Thursday statement.
Commenting on the current state of play Engie board chairman Clamadieu said: “The potential sale of all or part of our equity ownership in SUEZ is consistent with the acceleration of our development in infrastructure and renewable energies. The Board will pay very close attention to the fair valuation of this equity ownership, as well as to the strength of the industrial project and the guarantees provided to all stakeholders."