(News Bulletin 247) – The IT group has announced that it is in discussions with Airbus to sell its BDS division activities (cybersecurity and big data), for an indicative enterprise value of between 1.5 and 1.8 billion euros. euros.

The Atos file is definitely a file with drawers. In the midst of a transformation to ensure its future, the IT group announced this Wednesday that it was in preliminary discussions with Airbus to sell its big data and cybersecurity (BDS) activities.

Atos will “open a due diligence phase [procédure détaillée d’examen des comptes, NDLR] with Airbus for the potential sale of the entire BDS scope, indicated the IT group atos.net/fr/2024/communiques-de-presse_2024_01_03/point-de-marche-2″>during a market update aimed at informing stakeholders of the progress of the group’s transformation projects and “corresponding projects”.

It must be said that the company had to clarify the situation, while press reports indicated such discussions. In mid-December, Le Figaro had already revealed that Airbus had returned “in force” to the Atos file and was closely interested in the takeover of BDS. The aeronautical group and the board of directors of Atos had entered into “bilateral discussions”, said one of the two sources interviewed by the daily. Which caused the stock to jump 21% on the day of the announcement, Friday December 15.

“If the new discussions are confirmed, this could represent a transaction of 1.5 to 2.5 billion euros according to us,” explained Cloé Lemarié, the Jefferies analyst covering Airbus in a note in reaction to the information from Le Figaro.

For its part, Atos gave more details this Wednesday morning. The indicative offer is based on an enterprise value of 1.5 to 1.8 billion euros for the entire BDS scope, i.e. the bottom of the range predicted by the Jefferies analyst.

The aircraft manufacturer’s proposed purchase of all of BDS offers a “stronger justification than the previous proposed acquisition of 29.9% in Eviden, but it still competes with share buybacks and may be perceived as being political”, underline the Jefferies analysts cited by Reuters this Wednesday morning.

On the Paris Stock Exchange, Atos shares rose 11% in early trading, before falling into the red and plunging 4.9% around 12:30 p.m. At the same time, Airbus shares fell 1.97% in a falling Parisian market (-1.27% on the CAC 40).

Thales in the dance?

Remember that the aeronautics and defense group had previously, in February 2023, discussed with Atos a stake of around 30% in Eviden before giving it up under pressure in particular from the TCI fund.

If this progress update gives some visibility to these discussions, it is not certain that they will succeed since they are at a preliminary stage. Especially since the aeronautics group is not the only one eyeing BDS, at least on part of the scope of this activity, adds Atos, which does not specify the identity of the company in question. “It could be another CAC 40 group, Thales,” says Jefferies, quoted by AFP.

But the defense group wanted to put an end to these recurring speculations about a possible interest in BDS. Thales told Reuters on Wednesday that it wanted to put an end to “the questions and fantasies”, and recalled through its spokesperson that it had “no intention of diversifying into markets other than those where it is already present.” .

Further discussions on Tech Foundations

For Atos, the sale of BDS is necessary. The company is in a complex financial situation which has forced it to carry out major restructuring projects. In 2022, the group announced that it would split into two, with on the one hand its historic outsourcing businesses (Tech Foundations) and on the other hand Eviden, which brings together growing activities (application services, supercomputers, big data) and which will become “the new Atos”. This last branch includes BDS, which is the subject of Airbus’ marks of interest with a view to strengthening its “defense and security portfolio thanks to leading capabilities in the fields of cyber, advanced computing and artificial intelligence.

This Wednesday, the IT group indicated that it was continuing discussions initiated last August with EP Equity Investing (EPEI), Daniel Kretinsky’s holding company for the acquisition of Tech Foundations. An operation which was strongly contested by shareholder funds but also by the political class.

Its financial director Paul Saleh clarified this Wednesday morning that these negotiations “were taking longer than expected”, “without certainty that they would lead to an agreement”, during a conference call. Discussions are continuing on the price to pay, the structure of the operation and the transfer of a very large part of the liabilities attached to Tech Foundations.

As part of this agreement, Daniel Kretinsky was also to participate to the tune of 180 million euros in a capital increase of 900 million euros in Eviden, and take a 7.5% stake.

However, Atos has revised downwards the amount of fundraising planned to bail out Eviden, due to “changing conditions and market reactions”. Another new feature, Atos is also examining with EPEI “the legal and financial conditions under which the holding company could be released, in whole or in part, from its commitment” to take 7.5% of Eviden.

A wall of debt

Faced with the reduction in the size of the planned capital increase, Atos plans “well beyond” the asset disposal program of 400 million euros presented at the end of July”, with the sale of other complementary assets, “whether the operation with EPEI leads to an agreement or not”.

The company is in fact engaged in a race against time to honor its financing deadlines. Atos must repay or refinance 3.65 billion euros of loans or bonds by the end of 2025. A bond loan amounting to 500 million euros, for example, matures in November 2024.

Faced with this significant wall of debt, Atos must negotiate now with its banks and “does not rule out using the legal protection mechanisms at its disposal to supervise” these negotiations, without specifying which ones.

“The possible options for Atos must be examined during the first quarter of 2024 in order to confirm that they will be sufficient to ensure the long-term coverage of financing maturities and the group’s cash flow needs,” adds Atos.

At the same time, Atos took note of the resignation of four members of its board of directors (Valérie Bernis, Aminata Niane, Vernon Sankey and René Proglio), adding a little more uncertainty on the management of the Dantesque transformation of the company computer science.