Airbus pulls up hard, no longer buying 29.9% stake in Atos-owned Evidian
Under pressure from activist investor, top brass agree to plot new course
Airbus has pulled out of negotiations to buy almost a third of Evidian following intense public pressure from an activist investor who described the transaction as an apparent bail out of parent Atos.
In a note to investors, the aerospace giant said yesterday: "After careful consideration, Airbus SE has come to the conclusion that the potential acquisition of a minority stake of 29.9 percent in Evidian does not meet the company's objectives in the current context and under the current structure."
Evidian houses the faster growing parts of Atos including the security business, cloud operations, HPC and digital transformation. It employs 59,000 people and turned over $5.12 billion in sales in 2021. It is being spun out of Atos later this year and will float on the Paris Exchange, under a plan that was hatched last summer.
Airbus said on February 16 it was in talks to invest in the unit, supposedly to tap into its security skills and digital know-how.
This evidently didn't make finance sense to major Airbus shareholder TCI Fund Management boss, whose boss Sir Christopher Hohn pressured Airbus management to "immediately terminate negotiations" as investment "would be stranded capital and an extremely inefficient use of shareholder funds."
"The transaction appears to be a bailout of Atos, a company that is burdened with unsustainable levels of debt and other liabilities," he wrote in an open letter to the Airbus board.
Maybe Airbus was swayed by strong words from a hedge fund that owns a 4 percent stake, valued at €4 billion, or management simply decided their money was better used elsewhere. Either way it leaves Atos without the "anchor shareholder" that Chairman Bertrand Meunier was thrilled with.
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Airbus said in its statement yesterday it will continue to talk "other potential options" with Atos and "pursue the work on the long term strategic and technological partnership… which has the potential to create significant value for both companies."
The end of negotiations hit Atos' share price hard, plunging almost 17 percent.
The split of Atos is still going ahead, with the other half of the company – datacenter, hosting, digital workplace, unified comms and BPO – referred to by management as the Tech Foundation Company. This area has 49,000 staff and turned over $5.65 billion in 2021. It is a shrinking entity and was seen as the least attractive parts of the organization.
Now Atos will need to find alternative funding to help pay for its expensive internal transformation. ®