(News Bulletin 247) – Known for its campaigns against Scor or Club Med, this fund strongly contests the conditions of sale of Tech Foundations to Daniel Kretinsky and demands the abandonment of this sale.

The “transformation of Atos” is far from following a long, quiet river. The digital services company decided at the beginning of August to sell its historic scope (“Tech Foundations”), which notably brings together outsourcing activities in sharp decline, to Czech businessman Daniel Kretinsky.

This transaction will take place, according to Atos, on the basis of an enterprise value of 2 billion euros, including a cash contribution of 100 million euros and reversals of balance sheet liabilities of 1.9 billion euros. euros.

With this sale, Atos will remain listed and will change its name to Eviden, refocusing on its growing activities (cybersecurity, digital transformation, big data, etc.). This marked a 180 degree turn from the group’s initial plan which was to list Eviden on the stock market.

In addition, the agreement with Daniel Kretinsky provides that the latter will participate to the tune of 180 million euros in a capital increase of 900 million euros for Eviden. This announcement inevitably seized up the market, since Atos currently weighs around 785 million euros on the stock market. “Knowing that 80% of this raising will be done at a price that is not fixed at this stage, the risk of massive dilution is great and will increase as the stock falls. The operation is only planned for the end of 2023- at the beginning of 2024, time is against shareholders,” Invest Securities emphasized in August.

Atos must submit this overall transformation plan at a general meeting to be announced in the fourth quarter.

>> Access our exclusive graphic analyses, and gain insight into the Trading Portfolio

A wave of protests

This project sparked a wave of protests, including the creation of an association called UDAAC for “union of angry Atos shareholders”.

And this Wednesday, a French “hedge fund” and not the least invited itself to the dance: CIAM. This fund has led numerous campaigns, notably against the Club Med takeover bid in 2013-2014 or the Fiat Chrysler – Renault merger project (which had been abandoned) in 2019. But its most famous campaign was probably the one against the reinsurer Scor, CIAM contesting the refusal of the merger with Covéa and the remuneration of the CEO at the time, Denis Kessler. During Scor’s 2019 general meeting, the remuneration of the Scor boss was narrowly approved by the group’s shareholders, following the CIAM campaign, which had again criticized the company in May. governance of Scor.

To return to Atos, CIAM claims in a press release to have sent to the group’s board of directors as well as to the Financial Markets Authority (AMF) a vitriolic letter on the company’s transformation project, denouncing the conditions of the sale of Tech Foundations to Daniel Kretinsky. CIAM therefore requests that this sale project be abandoned.

“The modification of the transformation plan decided by the board of directors in order to sell the Tech Foundations activity to Mr. Kretinsky is unfavorable to the company and its shareholders. We recognize the need for a capital increase to finance the restructuring of Tech Foundations only if this promising activity remains within the scope of social assets”, explain Catherine Berjal and Anne-Sophie d’Andlau, directors of CIAM, in the press release. “We will oppose the implementation of this plan as well as any proposal that would lead to the dispossession of Atos SE shareholders without a fair sharing of value,” they add.

“The conditions announced for the operation appear misleading and fail to specify the existence of a negative transfer price,” CIAM also states. According to The echoesthe fund does not plan to ally with UDAAC.

A difficult struggle to decide

Contacted by News Bulletin 247, an Atos spokesperson indicated that the group had received the letter from CIAM and did not make any additional comment. The chairman of the board of directors of Atos, Bertrand Meunier, who is also accused by CIAM, defended the Atos transformation plan on Monday in an interview with The gallery. The manager notably explained that Daniel Kretinsky’s offer was the only concrete one for Tech Foundations.

“It is difficult to know if CIAM will succeed in moving the lines, because the unknown remains the impact that the fund will have on small investors, who are now very present in Atos. Sycomore AM (an investment company, Editor’s note) had already carried out a revolt but without enormous success,” judges an analyst.

“The problem also is that the alternative of keeping Tech Foundations may not be such a good idea, because while this business has recently improved under the new management of Atos, it remains very cash intensive , with restructuring to be carried out. Tech Foundations may remain a time bomb,” adds this expert.

As for the negative transfer price to Kretinsky put forward by CIAM, “we can reach this conclusion by taking into account the fact that Atos will normalize the working capital requirement of Tech Foundations and the factoring. But this is to forget that the cash outflows to which Tech Foundations is committed (retirement pension fund, severance pay linked to restructuring) and the rest of the restructuring costs will be the responsibility of Daniel Kretinsky”, he says.

Pending the evolution of this game, Atos shares rose 1% this Wednesday on the Paris Stock Exchange to 7.068 euros around 10:20 a.m.