PARIS (Reuters) – French utility Engie <ENGIE.PA> called on Suez’s management on Tuesday to start talks with bigger rival Veolia <VIE.PA> after Veolia offered last month to buy Engie’s 29.9% stake in Suez <SEVI.PA> for 2.9 billion euros ($3.4 billion).
Veolia has described the offer as part of its ambition to create a “world champion of ecological transformation”.
Engie’s board chairman Jean-Pierre Clamadieu said the Sept. 30 expiry of Veolia’s offer and the fact that no counter-bid had emerged was putting Engie, which owns almost 32% of Suez, under pressure.
Clamadieu also said Veolia’s plan for Suez was solid and that Engie’s board would decide on Wednesday on the group’s bid, which it has promised to enhance, whether it be the price or commitments in terms of jobs.
“About the price, I don’t know what (Veolia CEO) Antoine Frerot will tell us today or tomorrow. Engie’s board will have to decide tomorrow what position it will take regarding this offer”, he told a parliamentary hearing.
Activist fund Amber earlier urged Engie’s board to decide on Veolia’s offer by Wednesday, dubbing it a “unique opportunity (…) that should not be missed”.
Clamadieu also said he was disappointed no rival bid emerged for Suez and added he had been taken aback by the Suez’s management move to put its French water business in an “obscure” Dutch foundation, a move seen as a “poison pill” against Veolia.
Finance Minister Bruno Le Maire said the French state would not give in to any pressure over Veolia’s bid for Suez, asking both companies to be reasonable and stressing there was no rush.
The French state holds a 23.6% stake in Engie. Clamadieu said the government, as a board member, had approved Engie’s new strategic decisions, including the sale of financial holdings.
Suez shares were down 0.27% at 0910 GMT but still up more than 19% since Veolia announced its bid on August 30.
($1 = 0.8569 euros)
(Reporting by Benjamin Mallet; Writing by Matthieu Protard; Editing by Louise Heavens and Keith Weir)