TLDR: Atos shares plunged after the IT group cancelled its €1bn rights issue and started debt talks. The company also appointed CCMP Advisers, Rothschild & Cie and Perella Weinberg Partners to conduct a strategic review. Atos said it was in exclusive talks to sell a minority stake in Worldline. Full details of the review will be released in November. Atos is €1.2bn in debt, including €1bn borrowed for M&A.
Atos, the French IT and consulting company, saw its shares drop after cancelling a planned €1bn ($1.1bn) rights issue following a decline in its share price. In addition to cancelling the rights issue, Atos has started debt talks with banks as it seeks to reduce its borrowing costs. The company has also appointed advisers to conduct a strategic review, which will include looking at the options for its Worldline payments business. Atos is in talks to sell a minority stake in Worldline. The company is under pressure to reduce its debt, which stands at €1.2bn, including €1bn it borrowed for mergers and acquisitions.
Atos announced the cancellation of the rights issue and the start of debt talks in a statement on Tuesday. The decision to cancel the rights issue was prompted by a significant decline in Atos’ share price over the past month. Since September 2019, Atos’ shares have fallen by more than 40%, making it difficult for the company to raise the intended funds. As a result, Atos has decided to abandon the rights issue and focus on reducing its debt instead. The company is currently in talks with banks to negotiate a refinancing of its debt, which will allow it to lower its borrowing costs.
In addition to the cancelled rights issue and the debt talks, Atos has appointed advisers CCMP Advisers, Rothschild & Cie and Perella Weinberg Partners to conduct a strategic review. The review will include a look at different options for Atos’ Worldline payments business, including a potential sale of a minority stake. Atos has said that it is in exclusive talks with an unnamed party regarding the sale of a minority stake in Worldline. The company intends to release full details of the strategic review in November.
The cancellation of the rights issue and the start of debt talks mark a significant shift in Atos’ strategy. The company had previously been focused on growth through acquisitions, borrowing €1bn to fund M&A activities. However, the decline in Atos’ share price has put pressure on the company to reduce its debt and improve its financial position. By cancelling the rights issue and starting debt talks, Atos hopes to lower its borrowing costs and strengthen its balance sheet. The strategic review will also allow the company to explore options for its Worldline payments business, potentially unlocking value for shareholders.
