French water, waste and energy giant Suez SA has reaffirmed its opposition to a “hostile” bid for a stake in the company by corporate rival Veolia Environnement SA, warning that the deal threatened up to 10,000 jobs around the world.
Veolia is attempting to buy a crucial 29.9 percent stake in the firm held by power company Engie SA, which is backing the move.
However, Suez has been trenchant in its opposition to the bid and its board on Sunday made clear that it still considered its competitor to be maneuvering for a possible hostile takeover.
Suez chief operating officer Jean-Marc Boursier told journalists that his company had come up with its estimates of job losses in 2012 when the two companies had discussed plans for closer collaboration.
Up to 5,000 of the forecast lost jobs would be in France, he added.
In a brief letter to Veolia issued on Sunday, the board of Suez made clear that it was still opposed to its purchase of the Engie stake.
“I must inform you, to our regret, that the board of Suez considers that the proposal ... remains hostile,” Suez chair Philippe Varin wrote to Veolia director-general Antoine Frerot.
The statement followed a public pledge by Veolia earlier in the day not to launch a hostile bid.
“Any public bid capital bid for Suez will require a favorable response from Suez’s board,” it said in a statement.
Engie has likewise said it required the support of the Suez board before it would put up its 29.9 percent Suez stake.
Veolia announced its intention to bid for its long-time rival in August. Last week, it upped its bid for Engie’s stake to 3.4 billion euros (US$4 billion), with the new offer on the table until last night.
To get a deal over the line, Veolia had further expressed willingness to agree to a Suez demand to asset disposals of “around 5 billion euros” of international water service interests, including those of Suez in France.
If a deal does ultimately go through, it could be the catalyst for a full takeover of Suez, which provides municipal water services in many countries.
However, there seemed little sign that Suez would bend as it sought to “conserve in France a second player with global reach” in water and waste services, Varin wrote in his response to Veolia chief executive officer Antoine Frerot and released to the media.
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