Environment, Veolia, Suez. Mouth watering

Posted on Jan 9 2022 at 12:

If the evidences sometimes require more demonstrations than doubtful hypotheses, the conviction of the argument can prevail without failing. This is the lesson that will be learned from the stock market history of the Veolia-Suez battle, when the success of the takeover bid of the former Générale des Eaux on the former Lyonnaise, which he owns 85, 2%, precedes the baptism, the 14 next January, of the new group, in just sixteen months.

Les Cassandre who chronicled a slow drowning announced in the depths of the anti-trust to Antoine Frérot, his boss who broke a century and a half of coexistence with his enemy brother, witnessed the reverse. The tidal wave of decisions – an almost perfect anticipation of the demands of the Brussels gendarme who added only marginal transfers to that of most of Suez France – and of masterfully executed operations – the largest capital increase in Paris (2.5 billion euros) since 2017, oversubscribed at 100% with a very low discount (18, 1%), 2.5 billion hybrids, and a takeover bid of 13 billions (to 100 %) – placed the “> champion of ecological transformation self-proclaimed on the channel of a revaluation on the stock market.

The group is enlarged by 37%, more profitable and growing. Many brokers are targeting 40 euros and beyond for the title, a low water level not seen in fourteen years. % earned since September 2020 made their mouths water.

To note

The 19, 85 euros per item paid by Veolia for Suez (i.e. 19, 50 euros coupon attached, and a total of approximately 13 billions for 100% of the capital) represent 20, 4 times the adjusted earnings per share expected for Suez in 2020 by Bloomberg consensus, i.e. 4% premium on Veolia’s own multiple (19,6 times).