Franceinfo has been telling you all week about Veolia’s takeover bid with the 30% buyout of Suez, against its will, for a month of war of nerves. Ljustice suspended the acquisition by Veolia of Engie’s shares in Suez, this Friday, October 9. Veolia will have to be patient. Engie and Veolia will appeal this court decision. It is therefore an opportunity to look into this device which allows a company to buy another, listed on the stock exchange, sometimes therefore against its will.
This is where we talk about a hostile takeover bid, the opposite of a friendly takeover bid. A takeover bid is compulsory as soon as a company covets 30% or more of the capital of another company. It must indicate to the financial markets that it is preparing to buy all or part of another box. And then she has to set the purchase price per share. If the object of lust agrees, then this is called a friendly takeover. If this is not the case, that its board of directors is against, this is where we are talking about a hostile takeover.
In the Suez-Veolia file, SUEZ’s board voted against this takeover but you have seen that this was not enough because the price was attractive for the shareholder who was selling his shares, namely, the energy company Engie. And often moreover, it is the price which, in the end, tilts the scales and sweeps aside reluctance. This is what happened in 2006. The Indian Mittal ended up bending the French Arcelor after 5 months of fierce battle by raising the purchase price to a level difficult to refuse.
In fact, it is very complicated. Some companies have put in place safeguards to deter takeover bids: the raison d’être in their articles of association, the establishment of double voting rights to favor historical shareholders. The former majority deputy, Pierre Person, has just tabled a bill to ban them in times of health emergency but his text has very little chance of being adopted.
Since 2010, there have only been 6 hostile takeover bids out of a total of 350 offers, among them, the takeover of the seloger.com site by the German press group Alex Springer. Or one of the latest, that of the mobile game publisher Gameloft by Vivendi. Vincent Bolloré’s group, Vivendi, visibly ready to launch a new hostile takeover bid, this time for Lagardère. Vivendi has just taken a further stake in the press and publishing group and now holds more than 26%. After Suez-Veolia, whose takeover bid is suspended for the moment, it may be the new industrial war to follow.