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Czech billionaire Daniel Křetínský is in talks to buy Atos’s lossmaking IT services unit, as the French technology group tries to trim its debt and draw a line under long-running restructuring efforts.
The offer by Křetínský follows a recent buying spree in France, including indebted supermarket group Casino. Armed with a windfall from his assets in gas and coal, the billionaire has also snapped up stakes in British retailer J Sainsbury and Germany’s Metro.
The proposed deal, which splits the group into two, would see Křetínský plough more than €1bn into the takeover. This includes €100mn of cash for the operations and a further €800mn in funds to recapitalise the business, and more than €200mn to take a 7.5 per cent in the remaining listed Atos unit, set to be renamed Eviden, according to the company and people close to the talks.
The exclusive discussions come after more than six months of negotiations, and caps various attempts to stem the company’s share price decline. Atos has been embroiled in governance turmoil amid a rapid succession of management as well as losses in some of its divisions.
Atos also provides secured information systems for the French military and its restructuring efforts had been closely followed by the country’s government, according to people close to the talks. The company’s supercomputing business, big data and cyber security assets are highly prized and will now be part of Eviden.
An agreement with Křetínský will put an end to an attempt by Atos to split itself into two listed vehicles. Complex talks over the restructuring had at one point involved Airbus, which had bid for a 30 per cent stake in Eviden. Airbus walked away following pressure from hedge fund manager Chris Hohn, who had called it a bailout of Atos.
“This (new proposal) is essentially the planned split, just through other means,” a person close to the talks said.
Atos and Křetínský’s EP Equity Investments said a deal for Tech Foundations, which had revenues of €5.4bn last year and centres its business around IT consulting, would give it an enterprise value of €2bn, based on a cash injection of €100mn and €1.9bn in liabilities.
Restructuring costs at the unit, including planned redundancies among staff that now stand at 52,000, had contributed to deepening operating losses of €434mn across Atos as a whole in the first half of 2023. That had sent its shares tumbling 20 per cent last Friday. They were up about 5 per cent in early afternoon trading on Tuesday.
Atos’s market capitalisation stands at more than €1bn, and its shares have lost nearly 75 per cent of its value over the past two years. Its net debt stood at €2.3bn at the end of June.
Křetínský’s offer also includes acquiring the Atos brand, and he is expected to rename Tech Foundations accordingly.
The rest of Atos will be rebranded Eviden and the company is planning a €900mn capital increase, which will include an investment from Křetínský’s vehicle, the company said.
In a statement, Křetínský said a deal acquisition, which would include data centres, was “a great opportunity for us to invest in large-scale European IT infrastructure”.
“If [Křetínský] succeeds in turning it around, it’s a pretty good deal,” said another person close to the discussions.
Eviden aims to halve its leverage ratio to about twice its operating income by the end of 2025.
Following several debt-backed acquisitions, Atos has had a series of setbacks in recent years, after reporting accounting errors in the US in 2021 and abandoning a $10bn bid for US rival DXC Technology that year.