Crisis-stricken Atos says the chosen bailout proposal from its largest shareholder has fallen through, just weeks after being confirmed, leaving the IT services biz to consider two alternative bids.

Earlier this month Atos said it had accepted a restructuring bid from a consortium led by Onepoint, along with Butler Industries, and Econocom, and was in talks to reach a definitive financial agreement.

In its latest Market Update today, Atos says that the Onepoint consortium withdrew from discussions on June 25.

In light of this, Atos says it received from the representative committee of its bondholders (Steerco) a revised financial restructuring proposal that takes into account the decision from Onepoint. It has also received a proposal from rival bidder Czech billionaire Daniel Křetínský and his EP Equity Investment group (EPEI) to restart discussions.

We asked both Atos and Onepoint for an explanation for the breakdown in talks.

Onepoint told us it had nothing further to add beyond the statement posted on its website, which says: "Despite the tremendous commitment of Atos employees and the resilience of the Group's clients, the Onepoint, Butler Industries and Econocom consortium found that the conditions were not ripe to reach an agreement paving the way for a lasting solution to the financial restructuring and implementation of the One Atos project."

The revised financial proposal from Steerco appears to be the one Atos currently favors, and discussions are said to be continuing with certain banks on the proposal to reach an agreement as soon as possible.

However, the two proposals are not necessarily mutually exclusive, according to TechMarketView chief analyst Georgina O'Toole.

"In its 'confirmation of continued interest', dated yesterday, EPEI states that it is 'ready to consider allowing the bondholders and other creditors to participate through cash funding up to 49 percent of Atos' capital,' ie allowing them to contribute equity cash alongside EPEI in proportion to their shareholding," she said.

But there are still hurdles to overcome, O'Toole notes, because EPEI will need to submit a revised offer, and it is seeking to better understand the current trading status of Atos and the divestment processes including the French government's interest in securing the integrator's big data and security divisions.

With regard to €700 million ($748 million) sale, Atos says it has now finalized negotiations with the French state, and the agreement, approved on June 25 by the Atos Board of Directors, will be signed June 26.

Under the agreement, the French state will benefit from governance rights at the level of Bull SA, the part of the company that deals with supercomputers, "to protect sovereign sensitive activities."

The agreement also provides a right for the French state to purchase those "sovereign sensitive activities" if a third party should acquire "10 percent or a multiple of 10 percent of Atos's or Bull SA's share capital or voting rights" if the parties have not reached a reasonable agreement on how to protect national interests with regard to those operations.

This appears to be in addition to the non-binding offer from the French government to acquire the Advanced Computing, Mission-Critical Systems and Cybersecurity Products activities of the company's BDS (Big Data & Cybersecurity) division.

Atos says it still intends to reach a definitive financial restructuring agreement with a majority of its financial creditors during the week of July 22.

The company expects that the new money backstop process for €1.5 billion ($1.6 billion) new money debt and €75 million ($80 million) new money equity will be provided as the restructuring plan gets started this week, and the definitive financial restructuring agreement will then be implemented through a dedicated accelerated procedure.

Atos must be hoping that this agreement will finally come off and it can start to put the chaos of the past several years behind it.

O'Toole added: "We're likely to see a few more twists and turns before then." ®

https://www.theregister.com//2024/06/26/atos_restructure_deal_fails/