{"id":4173,"date":"2023-10-22T07:00:51","date_gmt":"2023-10-22T07:00:51","guid":{"rendered":"https:\/\/infundpros.com\/business\/saving-atos-jean-pierre-mustier-handed-one-of-frances-messiest-rescue-missions\/"},"modified":"2023-10-22T07:00:51","modified_gmt":"2023-10-22T07:00:51","slug":"saving-atos-jean-pierre-mustier-handed-one-of-frances-messiest-rescue-missions","status":"publish","type":"post","link":"https:\/\/infundpros.com\/?p=4173","title":{"rendered":"Saving Atos: Jean-Pierre Mustier handed one of France\u2019s messiest rescue missions"},"content":{"rendered":"
\n

A French paratrooper in his youth, Jean-Pierre Mustier has been parachuted in to manage the kind of corporate minefield his home country seems adept at producing.<\/p>\n

The former UniCredit chief may face his biggest challenge yet as chair of IT services group and military contractor Atos following his predecessor Bertrand Meunier\u2019s resignation last Monday. Mustier now has the prospect of angry minority shareholders, looming debt repayments, a bruised board and political opposition to a break-up plan concocted with Czech billionaire Daniel K\u0159et\u00ednsk\u00fd \u2014 all under the watchful gaze of the French state. <\/p>\n

\u201cWhile Mustier\u2019s job is not impossible, it is a very difficult task\u2009.\u2009.\u2009.\u2009and you are forced to make a decision. You can\u2019t kick the can down the road because of the liquidity issue, the funding crisis,\u201d said Chandramouli Sriraman, analyst at Stifel.<\/p>\n

The slow demise of what was once seen as a national champion has gripped France\u2019s business and defence circles, who wonder how a company whose supercomputers run models for the French nuclear arsenal could fall on such hard times. <\/p>\n

K\u0159et\u00ednsk\u00fd\u2019s move to buy the company\u2019s legacy IT unit and a stake in the faster-growing big data business has added a nationalistic twist to the saga, with rightwing lawmakers agitating over the sale of a holding in a sensitive business to a foreigner. <\/p>\n

Shares in Atos, which has changed chief executive three times in as many years, have fallen 90 per cent in the past three years to \u20ac4.68, giving the company a market valuation of \u20ac521mn.<\/p>\n

\u201cIt has become a political issue,\u201d said economist Jean-Herv\u00e9 Lorenzi, lamenting \u201cthe mess\u201d that a company managing all the IT for next year\u2019s Olympic Games in Paris \u201chas been allowed to slide into\u201d.<\/p>\n

Mustier\u2019s first task will be to assess whether he can salvage the rescue plan spearheaded by Meunier, who invited the former Soci\u00e9t\u00e9 G\u00e9n\u00e9rale banker and fellow alumnus of elite engineering school \u00c9cole Polytechnique to join the board in May. That deal involves selling Atos\u2019s lossmaking IT consulting unit to K\u0159et\u00ednsk\u00fd, who has also agreed to inject cash into the rebranded faster-growing supercomputing and cyber security division Eviden via a capital raising.<\/p>\n

\u201cIf we don\u2019t split, it\u2019s like having conjoined twins and one of them is extremely sick and you decide to kill both of them,\u201d said a person close to Atos. \u201cThere is no good option.\u201d<\/p>\n

Created in the 1990s, Atos provided digital services to companies in the early internet years. Under Thierry Breton, a former French finance minister who became Atos CEO for a decade until 2019 and is now EU commissioner for internal markets, the company took on debt to fund acquisitions, reaching more than \u20ac14bn in market value. But it came late to cloud computing, buying supercomputer maker Bull in 2014. <\/p>\n

After Breton\u2019s departure the group racked up setbacks including the aborted purchase of US IT services firm DXC in 2021 and an accounting probe in the US. Business has deteriorated since Atos unveiled the break-up plan last year.<\/p>\n

K\u0159et\u00ednsk\u00fd in August agreed to participate in a \u20ac900mn capital boost for Eviden in exchange for a 7.5 per cent stake \u2014 a financial contribution Meunier sought to help meet Eviden\u2019s capital needs and the \u20ac2.25bn in debt payments it faces in 2025. That part of the deal, however, has drawn fire from shareholders, defence officials and politicians.<\/p>\n

K\u0159et\u00ednsk\u00fd reached the deal when Atos shares were worth around \u20ac15. If carried out now, the capital raising would be much more dilutive and less appealing for existing shareholders, who will vote on it at a meeting next year.<\/p>\n

<\/source><\/source>\"Czech<\/picture>
A break-up plan concocted with Czech billionaire Daniel K\u0159et\u00ednsk\u00fd has run into political opposition<\/span> \u00a9 David W Cerny\/Reuters<\/span><\/figcaption><\/figure>\n

Hedge fund CIAM and UDAAC, a grouping of small investors, have also accused Atos chair Meunier of misleading and inadequate disclosures in lawsuits filed against the company. Another small shareholder, Alix AM, has filed a complaint with France\u2019s financial prosecutor for \u201cactive and passive corruption\u201d in the planned transaction with K\u0159et\u00ednsk\u00fd. Atos has \u201cfirmly\u201d rejected the allegations.<\/p>\n

\u201cWe are glad that [Meunier] is gone\u2009.\u2009.\u2009.\u2009but Mustier is taking up the same project, so ultimately, it\u2019s a bit of window dressing,\u201d said CIAM chief Catherine Berjal.<\/p>\n

The prospect of K\u0159et\u00ednsk\u00fd taking a stake in the division responsible for Atos\u2019s most sensitive tech has also raised concerns among government officials and politicians. \u201cThe hypothesis of such a powerful, foreign player getting closer to our most sensitive military capacities deserves all our attention,\u201d centre-right lawmakers said in a letter published in August.<\/p>\n

Many believe Mustier will go back to the drawing board. \u201cEither the [shareholder vote] never happens or it is called and the shareholders refuse the capital increase,\u201d said Sophie Vermeille, a lawyer for UDAAC. \u201cThe only question is when Atos puts in place a plan B.\u201d<\/p>\n

One person familiar with the talks over the company\u2019s future said \u201cMustier\u2009.\u2009.\u2009.\u2009is not going to take the slightest risk\u201d.<\/p>\n

People close to K\u0159et\u00ednsk\u00fd\u2019s side say he would gladly do without the stake in Eviden, describing political criticism as a \u201cthorn in our side\u201d.<\/p>\n

The Czech energy tycoon, a fluent French speaker who started investing in France in 2018 and has impressed the Paris elite with his knowledge of French literature, has bought publisher Editis from Vivendi, invested in appliance retailer Fnac-Darty and is taking over food retailer Casino. But he sold a stake in newspaper Le Monde last month after a newsroom revolt.<\/p>\n

Atos executives admitted last Monday that if the K\u0159et\u00ednsk\u00fd deal fell through they would need to look for other options, including asset sales, a share sale or issuing more debt.<\/p>\n

Defence groups Thales and Airbus have expressed an interest in Atos assets, including the cyber security business, according to people close to the matter. The government might turn to these companies if it loses trust in Atos to handle its military activities, the people added.<\/p>\n

<\/source><\/source>\"An<\/picture>
An Atos cyber security centre for the Paris Olympics<\/span> \u00a9 Pierre Philippe Marcou\/AFP via Getty Images<\/span><\/figcaption><\/figure>\n

Meanwhile the blame game has begun on Atos, with some pointing the finger at Breton. Critics, including Meunier, say the former finance minister pressed ahead with acquisitions for the sake of growth. <\/p>\n

In an interview with La Tribune last month, Meunier said Breton\u2019s acquisition strategy had been \u201cachieved with questionable or insufficient selectivity and the signing of contracts whose remuneration was too low in relation to costs\u201d. <\/p>\n

A former Atos employee close to Breton hit back, saying it was Meunier\u2019s erratic strategy that had dragged down Atos, distracted its management and led investors to lose trust in the group.<\/p>\n

Meunier pushed to have the state take a stake in the company to stabilise the shareholding but was rebuffed by the finance ministry and other officials, according to a person with knowledge of the meetings. \u201cThey didn\u2019t want to save Atos,\u201d the person said. <\/p>\n

Meunier, Mustier, Atos and the French finance ministry declined to comment. <\/p>\n

But some in Paris business circles argue that Meunier, a former private equity executive at PAI Partners and CVC, shares the blame after putting forward turnaround plans that have foundered while shareholders grew frustrated by the falling share price. <\/p>\n

\u201cMeunier likes to blame Breton, but he left four years ago,\u201d said CIAM\u2019s Berjal. \u201cHe could have made better choices.\u201d<\/p>\n

For the person familiar with talks over the company\u2019s future, \u201cMeunier inherited a difficult situation but did not handle it well, and the house of cards fell down. That\u2019s the story.\u201d<\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

A French paratrooper in his youth, Jean-Pierre Mustier has been parachuted in to manage the kind of corporate minefield his home country…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[22],"tags":[],"class_list":{"0":"post-4173","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-business"},"yoast_head":"\nSaving Atos: Jean-Pierre Mustier handed one of France\u2019s messiest rescue missions | inFundPros<\/title>\n<meta name=\"description\" content=\"A French paratrooper in his youth, Jean-Pierre Mustier has been parachuted in to manage the kind of corporate minefield his home country seems adept at\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/infundpros.com\/?p=4173\" \/>\n<meta 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