(Bloomberg) — Atos SE chose a rescue proposal from a group led by David Layani’s Onepoint, its main shareholder, beating a rival bid from Czech billionaire Daniel Kretinsky for the troubled French IT company.
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Onepoint’s rescue plan for the troubled French IT company, which includes new capital and reduced debt, has the support of the board and the company will now try to reach a final agreement with its creditors by July, Atos said in a statement on Tuesday -fair. The Onepoint-led offering was also backed by Paris-based investment firm Butler Industries and digital transformation specialist Econocom Group SE.
Onepoint’s so-called “One Atos” plan will hugely dilute existing shareholders, but should help the company avoid a breakup and remain under French ownership. Founder Layani, 45, will take on the role of CEO. Kretinsky’s offer aimed at more radical debt reduction and suggested selling the company’s digital businesses.
Atos, with around 5 billion euros in debt, has been under a formal restructuring process – known as conciliation – since April with creditors and banks to try to avoid bankruptcy. The selection of the Onepoint-led bid marks the culmination of months of negotiations involving the deeply troubled company’s banks, creditors, shareholders and the French government.
Atos shares fell 15% in Paris on Tuesday. Bonds issued by Atos, which are trading at deeply troubled levels, gained following the announcement. The €350 million ($376 million) worth of notes due in November 2028 were priced 4.6 cents per euro higher at 31.5 cents, according to data compiled by Bloomberg. This is the biggest increase since April.
The Onepoint consortium has offered €250 million in new capital, €1.5 billion of debt into new money and intends to convert €2.9 billion of Atos’ debt into shares to save the company.
The offer “has the support of a large number of Atos’ financial creditors” and is aligned with its corporate interests, the company said in the statement.
What Bloomberg Intelligence says:
Onepoint’s restructuring proposal for Atos – which its board accepted over a competing offer from Czech investor Daniel Kretinsky – will result in massive dilution, virtually putting an end to Atos’ equity narrative. The agreement provides for the conversion of 2.9 billion euros of Atos debt into shares, resulting in at least 2.5 billion new shares against the 112 million in circulation. Atos has a debt of around 5 billion euros and has yet to reach an agreement with creditors.
— Tamlin Bason, litigation and industry analyst at BI TMT
Founded in 2002, Onepoint is a much smaller IT group than its target, with around €500 million in revenue last year, compared with €10.7 billion for Atos. Onepoint became Atos’ major shareholder last year after months of setbacks for the larger company, including failed deals, management turnover and a dramatic drop in its valuation.
Rival competitor EPEI made its fortune in the energy sector, but has sought to diversify in recent years, mainly targeting entities in financial difficulties. Kretinsky’s private conglomerate completed its acquisition of troubled French supermarket chain Casino Guichard Perrachon SA in March and is in the process of buying Royal Mail in the UK. It has been hanging around Atos for almost a year, initially seeking to buy its former IT division before making a company-wide rescue offer.
Atos was once one of France’s top technology companies, aiming to take market share from Accenture Plc and Capgemini SE before accounting scandals and huge debts left it on the brink of insolvency. Although Atos has lost 90% of its value in the last year, it remains an important IT services provider in its home country, with strategic contracts linking it to the nuclear and defense industry, as well as the Olympic Games.
The collapse of Atos was a new test for France’s restructuring regime following the collapse of nursing home operator Orpea and Casino. It also forced the government to contribute €50 million in bridging funding and make a separate bid for its most sensitive supercomputing unit.
Atos said separately on Tuesday that it has entered into exclusive negotiations with French IT and engineering company Alten SA for the sale of its smart energy business, Worldgrid, in a deal valued at 270 million euros. The transaction is expected to close before the end of 2024 and is subject to regulatory approvals, the company said in a statement.
French Finance Minister Bruno Le Maire said last month that the unit, including the systems used to control French nuclear power plants, should remain under French state control, adding at the time that public energy giant Electricite de France SA could be a candidate.
–With assistance from Vlad Savov and Libby Cherry.
(Updates with exclusive talks with Alten in the penultimate paragraph)
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