BRUSSELS, April 8 (Reuters) - Suez will call on European Union antitrust regulators to reject Veolia’s request to be allowed to vote at its shareholder meeting, people familiar with the French waste and water management company’s thinking said.
Veolia is Suez’s top shareholder and wants the EU watchdog to allow it to use its 29.9% stake to vote out board members, annul a Dutch “poison pill” and halt asset sales.
EU merger rules prevent companies from exercising control or influencing their target before a deal is cleared by regulators.
Exemptions are rare and only permitted if the acquiring company acts only to maintain the full value of its investments, or regulators see the deal as a threat to competition.
The effects of such an exemption on third parties could also be a factor in the EU’s decision-making process.
This week, Suez will tell the European Commission that none of these factors apply in Veolia’s case, the people said.
Suez declined to comment. Veolia had no immediate comment.
Measures taken by Suez to ward off Veolia’s hostile 11.2 billion euro ($13.3 billion) bid have had no impact on the its investments, the people added, pointing to the more than 7% rise in Suez shares since it was launched on Feb. 7.
“All the decisions taken by the board have increase Suez’s long term value,” one of the people said.
Allowing Veolia to vote at Suez’s upcoming AGM would in effect allow the rival firm to jump the gun before getting regulatory clearance for the bid, the people told Reuters.
“They want to be allowed to vote on the removal of board members or the nomination of board members. This is clearly unprecedented, to already take control of the target,” one said.
Suez has yet to call an annual general meeting but legally one has to take place before the end of June. ($1 = 0.8410 euros) (Reporting by Foo Yun Chee; Additional reporting by Gwenaelle Barzic in Paris; Editing by Alexander Smith)