Royal Mail’s would-be buyer looks to take over French tech company

French tech company Atos, the official tech partner of the 2024 Paris summer Olympics, has seen considerable takeover interest from Czech billionaire Daniel Kretinsky, also known as the “Czech Sphinx”. This has been done in partnership with hedge fund Attestor, as well as EP Group, Kretinsky’s investment vehicle.

Kretinsky has recently also put forward a takeover offer for the UK’s Royal Mail, citing disappointing service delivery, reducing financial performance and a sluggish overall transformation as some of the main reasons behind the bid.

However, he has reassured Royal Mail’s parent company, International Distributions Services (IDS) that it would be supporting the company every step of the way to rebuild and transition into a modern postal services provider.

Royal Mail has consistently failed to meet targets for its first class and second class deliveries since 2019 onwards.

Kretinsky’s latest bid for Atos comes at a time when the French tech company is exceptionally debt-laden, weighed down by some €5 billion of debt. It has now announced that it would be need around €1.1 billion if it is to keep operations running until next year.

Kretinsky has backed up his bid by arguing that it would provide quick and easy capital, as well as much-needed direction for Atos, which would eventually help it get back on track, with a robust strategy.

Atos has also received three other takeover bids, from Bain Capital, which it has chosen to decline, from a group of banks and bondholders from its own banking group, as well as from Onepoint, in partnership with Butler Industries.

Why could Kretinsky’s bid for Atos be problematic?

One of the main reasons Kretinsky’s bid for Atos might cause a few issues is due to the French government being quite opposed to foreign takeovers, having vocally expressed objections at other foreign bids, such as the proposed Danone takeover in 2005 by PepsiCo.

Apart from the Paris Olympic tech contract, Atos currently also holds several important state contracts, such as operating supercomputers for the French nuclear deterrent, as well as French military contracts.

As such, Kretinsky’s bid could be subjected to increased scrutiny by the French authorities, which could potentially delay and complicate matters significantly. Given that Atos has already received significant interest from other companies for a takeover, it may well choose to accept one of the other options, if legal complications for Kretinsky’s bid go on too long.

Jean-Pierre Mustier, chairman of Atos SE said in a statement: “I would like to thank each of the submitting parties for their refinancing proposals received as part of our current conciliation process. I am pleased to note that the key representatives of our bondholders and of our banking group are working together constructively to find a refinancing solution for Atos.”

Atos SE’s chief executive officer Paul Saleh said in the statement: “We will now work with our financial creditors to find a solution by May 31 that will be acceptable to them and consistent with the parameters we have shared.

“I am confident that a final agreement can be reached by the July target that would assure the continuity of operations to our clients and be in the best interest of Atos’ employees, clients, suppliers, creditors, shareholders and other stakeholders.”