By Gwénaëlle Barzic and Sarah White
PARIS (Reuters) – Veolia raised its offer for a stake in Suez to 3.4 billion euros (3.12 billion pounds) on Wednesday, giving power group Engie a midnight deadline to decide whether to sell as the French waste and water management firm presses for a takeover of its rival.
Suez <SEVI.PA> called on Engie’s <ENGIE.PA> board and shareholders to reject Veolia’s <VIE.PA> latest bid for the 29.9% holding, which was raised from 2.9 billion euros, and not to decide its future under the conditions and timetable set.
Veolia has been trying to persuade Engie to sell the stake as prelude to launching a full takeover bid for Suez, arguing the two would form a global waste and water champion better equipped to take on rivals, including from China.
Suez, which had previously described Veolia’s offer as hostile, said that there was no guarantee that its shareholders would benefit at the same price and conditions as Engie.
It has set about creating a foundation for its French water business, which could be a hurdle for any Veolia takeover and has led increasingly acrimonious tit-for-tat which the French government, an Engie shareholder, has been trying to defuse.
Veolia piled the pressure on Engie to come to a swift decision by saying its new 18 euros per share offer – up from 15.5 euros previously – would expire by the end of the day, sticking to a timetable it had set itself at the end of August.
“It (the offer) is still due to run out at midnight tonight,” Veolia Chief Executive Antoine Frerot told reporters.
Veolia also amended its bid by saying it would only launch a subsequent tender offer for the whole of Suez with the blessing of the company’s board, and offered a six month period during which to negotiate, should it acquire the stake.
Suez shares were up 3.5% to 15.45 euros at 1237 GMT. A full bid at 18 euros per share would value Suez at 11.2 billion euros.
French Finance Minister Bruno Le Maire on Wednesday urged Veolia to keep its approach friendly and said the parties needed time to work things out.
Speaking before details of Veolia’s revised offer emerged, Le Maire told LCI TV that the state, which has a 23.6% stake in Engie, would not be beholden to ultimatums.
Engie, which said its board was due to meet later but declined further comment, had been holding out for a higher bid and had said it would also be interested in any alternative proposals from Suez.
It had already earmarked the stake for disposal, but so far no other buyers have emerged.
Veolia has tried to pre-empt any anti-trust problems with a plan to sell Suez’s water business in France should the two conclude a deal.
Suez says the bid is opportunistic and would destroy jobs.
(Reporting by Dominique Vidalon, Matthieu Protard, Blandine Henault, Gwenaelle Barzic and Sarah White, editing by Louise Heavens, Mark Potter and Alexander Smith)