France's Veolia: we're open to talks on Suez offer price

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PARIS (Reuters) – French utility Veolia (PA:VIE) said on Tuesday it was open to discussions about the price it is offering to acquire Engie’s stake in water and waste management group Suez (PA:SEVI).

Veolia last month offered to pay 2.9 billion euros for a 29.9% stake in Suez owned by Engie (PA:ENGIE), with a view to subsequently taking full control of Suez by buying up more shares.

Engie rejected Veolia’s initial advance but has said it will consider a higher offer for the Suez stake. Suez Chairman Philippe Varin has called the Veolia bid “very hostile” and said Veolia’s plans for the business were unrealistic.

Speaking in an interview with Reuters, Veolia Chief Operating Officer Estelle Brachlianoff, who is also deputy CEO, said: “There is a legitimate debate on the price, clearly, and there will be a discussion to be had.”

But she said in Veolia’s view the price was not the main issue determining whether the deal goes ahead. She said besides the price, Engie was looking at the viability of the future entity, and guarantees on jobs.

She said time was a factor because Veolia wanted to make the deal before Suez, as part of an existing plan to revamp its business, divests more of its units.

“Time is pressing if we want to avoid the dismantling of Suez,” said Brachlianoff.

Earlier on Tuesday, Suez, which is rallying support for resisting the Veolia bid, said it planned to hand back more than 1 billion euros ($1.17 billion) to shareholders in dividends and share buybacks by the middle of next year.