French court blocks hostile takeover of utility firm Suez
A French court has ordered Veolia (Paris: VIE) not to launch a $13.6 billion hostile takeover bid for rival water and waste management firm Suez (Paris: SEV).
Why it matters: France is culturally averse to corporate takeover fights, as evidenced by government officials pleading for a peaceful resolution.
Background: Veolia acquired a 29.9% stake in Suez last fall, saying that any future acquisition offer would "require a prior favorable reception from Suez's board of directors."
- But the two sides couldn't agree, and Veolia on Sunday announced plans to go straight to Suez shareholders, with an €18 per-share offer ($21.70) for the remaining 70.1% stake. In response, Suez petitioned the court.
The bottom line: "This is the latest twist in a months-long battle that’s playing out in the boardroom, the courts and the French political arena. A hostile takeover is a rare thing in France, and the unions compared Veolia’s move to a 'declaration of war.' The increasing tensions may put pressure on the government to broker a deal," Marthe Fourcade writes for Bloomberg.