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Atos falls 16% as struggling French IT firms weigh bailout deals expected to result in ‘massive dilution’

This photograph taken on April 26, 2024 shows the headquarters of the French multinational information technology company ATOS in Bezons, near Paris. (Photo by Ludovic MARIN / AFP) (Photo by LUDOVIC MARIN/AFP via Getty Images)

Ludovic Marin | Afp | Getty Images

Shares of troubled French IT company Atos fell on Monday as the company finds itself between two rescue operations that are both expected to lead to “massive dilution” of existing shareholders.

Atos was down 16.07% as of 10:21 a.m. London time.

The two restructuring operations on the table are led by Czech billionaire Daniel Kretinsky and key Atos shareholder David Layani. The company will make its choice by Wednesday.

“Implementation of the proposals will in any case result in massive dilution of existing shareholders of Atos SE,” Atos said in a statement on Monday.

The company said it was working with its financial creditors to secure maximum support for one of the transactions by June 5, with the aim of reaching a final agreement on the restructuring in July.

Kretinsky had already held discussions with Atos to buy part of its activities, which collapsed. Layani’s IT consulting firm Onepoint held more than 11% of Atos’ share capital and voting rights as of December 2023, according to its website.

These agreements follow a series of failed negotiations on the total or partial acquisition of Atos’ activities. Airbus has also had such discussions.

In April, Atos announced that it had received a letter of intent from the French government to potentially acquire part of its business. At the time, the company indicated that a non-binding offer could be made in early June. On Monday, Atos indicated that due diligence on the transaction was still ongoing.

Atos holds several sensitive contracts with French authorities and the country’s army. She also manages data and cybersecurity for the Paris 2024 Olympic Games.

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