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Foreign rescues can cause tension. That applies to the intervention of Daniel Křetínský at French IT group Atos. Its interests in defence and cyber security mean that a potential stake for the Czech billionaire is making politicians nervous.
A deal that would break up Atos is also irking some shareholders. That emotion was seconded by rival IT consultancy Onepoint which announced a 10 per cent exposure this week.
Hopes of better terms jumped with the arrival of troubleshooter chair Jean-Pierre Mustier in October. The former boss of UniCredit has the unenviable job of salvaging a deal inked by predecessor Bertrand Meunier. Terms weighted heavily in Křetínský’s favour must be fixed or face rejection when shareholders vote sometime next year.
Atos’s big problem is a shrinking legacy outsourcing business, coupled with a faster-growing digital services arm. Onepoint actually offered to pay €4.2bn for the latter part last year, including debts. The entire company now has an enterprise value of just over €4bn.
The deal on the table would sell the legacy division to Křetínský while shareholders hang on to the racier part. But when they realised that Křetínský would pay just €100mn for it, the share price crashed.
Moreover, while Křetínský would take on some balance sheet liabilities like pensions and leases, no debt would be transferred. But he would receive €800mn of working capital. In effect, Křetínský would take over a business for next to nothing and that might generate an operating profit of €200mn a year by 2025, according to consensus estimates.
The only catch was that Křetínský promised to contribute to an equity capital raising for the digital business. This would remain listed under the new name Eviden. The tycoon would own about 7 per cent for a contribution of around €200mn
Shareholder pushback has already delayed a vote on the transaction until the spring. Onepoint’s intervention confirms that the deal is dead. It is time for image-conscious Křetínský to channel his energies into less controversial pursuits.
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