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One of France's most bitter takeover battles appeared a step closer to resolution Wednesday after water, waste and energy giant Veolia upped its offer for rival Suez, in a move welcomed by the latter's key shareholder, power supplier Engie.
Veolia said it was increasing its offer from 15.50 euros per share to 18 euros, raising the purchase price for Engie's 30-percent stake in Suez to 3.4 billion euros ($4 billion).
Suez itself -- which has repeatedly tried to scupper any takeover in the past --- angrily rejected Veolia's latest approach.
"Suez notes that Veolia persists in its proposals that are contrary to the group's corporate interest," it said in a statement.
The proposals "remain vague and... do not guarantee the interests of the shareholders," it said after a meeting of its board of directors.
It said it would "put all the means at its disposal to avoid a creeping takeover or de facto control by its main competitor."
And it "asks the board of Engie and its shareholders not to decide on the future of Suez under the conditions and timetable dictated by Veolia."
Suez has already taken a series of "poison pill" moves to thwart a possible takeover, including placing its key French water services business in an independent Dutch holding.
But Engie, for its part, said it welcomed Veolia's latest move.
After a meeting of its own board of directors, Engie said the revised bid "brings important clarifications and improvements compared to the previous offer."
And it "welcomes the additional commitments taken by Veolia, in particular regarding its industrial plans and guarantees provided on social matters, as well as the offered price," Engie said.
The new offer was "in line with (Engie's) expectations in terms of price and social guarantees," the statement added.
- Offer period extended -
As a result, Engie asked Veolia to extend "the validity period of its new offer until October 5" and "formalise its unconditional commitment not to launch a public tender offer that wouldn't be friendly."
And Veolia promptly responded by agreeing to both requests.
This means the deal could be the catalyst for a full takeover of Suez, which provides municipal water services in many countries around the world.
With the state holding almost 24 percent of Engie, French officials are eyeing the deal warily despite Veolia's pledges to maintain jobs in strategic sectors where the groups are global heavyweights.
"I want us to take all the time necessary" to study the deal, Finance Minister Bruno Le Maire said Tuesday, warning that "the state will not submit to any pressure."
Veolia said that, "taking into consideration both the French state and Engie's concerns", it had "decided to improve all the characteristics of its offer."
It vowed that a full bid for Suez would be launched only if its management agreed to the deal, and proposed a six-month period of talks to hammer out a friendly accord.
"I want to prove that my offer has never been hostile," Veolia chief Antoine Frerot told journalists during a conference call Wednesday.
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