Atos Says It Has Decided to Proceed With Onepoint’s Proposal

Atos SE chose a bailout proposal from a group led by David Layani’s Onepoint, its top shareholder, that will help the troubled French IT company avoid a breakup.

Author of the article:

Bloomberg News

Benoit Berthelot

Published Jun 11, 2024 • Last updated 36 minutes ago • 3 minute read

The Atos SE headquarters in the Bezons suburb of Paris, France, on Friday, March 22, 2024. Atos, the legacy IT company once seen as the rising star of France’s tech industry, is facing a wall of debt — and it’s running out of options for bringing it down. Photographer: Anita Pouchard Serra/Bloomberg Photo by Anita Pouchard Serra /Bloomberg

(Bloomberg) — Atos SE chose a bailout proposal from a group led by David Layani’s Onepoint, its top shareholder, that will help the troubled French IT company avoid a breakup.

Onepoint’s proposal, which includes new equity and reduced debt, has the support of the board and the company will now seek to reach a final agreement with its creditors by July, Atos said in a statement on Tuesday. The Onepoint-led bid was also backed by Butler Industries and Econocom Group SE.

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Layani beat out a second bid from billionaire Daniel Kretinsky’s EP Equity Investment, which targeted a more radical debt reduction and suggested selling off the company’s digital business. Under Onepoint’s “One Atos” plan, the company will remain largely intact, and French entrepreneur Layani, 45, will take over as chief executive officer.

The Onepoint consortium offered €250 million ($272 million) of new money equity, €1.5 billion of new money debt and aims to convert €2.9 billion of Atos’s debt into shares to save the company. Atos, loaded with close to €5 billion in debt, has been under a conciliation procedure since April with creditors and banks to try to avoid bankruptcy.

The offer “has the support of a large number of Atos’s financial creditors,” and aligns with the company’s corporate interests, “including its employees, customers, suppliers, creditors, shareholders and other stakeholders,” the company said in the statement.

What Bloomberg Intelligence Says:

Onepoint’s restructuring proposal for Atos — which its board has accepted over a competing offer by Czech investor Daniel Kretinsky — will result in massive dilution, all but putting an end to Atos’s equity narrative. The deal calls for converting €2.9 billion of Atos debt into shares, resulting in at least 2.5 billion new shares vs. the 112 million outstanding. Atos has close to €5 billion of debt, and will still need to reach an agreement with creditors.

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— Tamlin Bason, BI TMT litigation and industry analyst

Founded in 2002, Onepoint is a much smaller IT group than its target, with around €500 million of revenue last year compared with €10.7 billion for Atos. Onepoint became Atos’s top shareholder last year, following months of setbacks for the bigger firm, including failed deals, management turnover and a dramatic plunge in its valuation.

Atos was once one of France’s premier tech companies, setting its sights on taking market share from Accenture Plc and Capgemini SE, before accounting scandals and huge debts left it on the verge of insolvency. Even though Atos has lost 90% of its value in the last year, it remains a key IT services provider in its home country, with strategic contracts linking it to the defense and nuclear industry, as well as the Olympic Games.

The unraveling of Atos has been a new test for France’s restructuring regime, following the downfall of care-home operator Orpea and food retailer Casino Guichard-Perrachon. It also forced the government to contribute €50 million in interim funding and make a separate offer for its most sensitive supercomputing unit.

Atos is also reviewing offers for its smart energy business, Worldgrid. The unit, including systems used to control French nuclear plants, should remain under the control of the French state, Finance Minister Bruno Le Maire said last month, adding that public energy giant EDF could be a candidate.

—With assistance from Vlad Savov.

(Updates with additional details throughout. A previous version corrected the timing of Le Marie’s comments in final paragraph.)

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