By Gwénaëlle Barzic and Mathieu Rosemain
PARIS (Reuters) – Software company Capgemini <CAPP.PA> will stick to its bid of 14 euros ($15.43) per share for smaller rival Altran <ALTT.PA>, its chief executive told Reuters, as it tries to fend off pressure from activist hedge fund Elliott for a higher offer.
Elliott, which made waves in France last year when it revealed a stake in drinks maker Pernod Ricard <PERP.PA>, has since built a holding of more than 10% in Altran, regulatory filings show.
It has also said Capgemini’s 3.6 billion-euro (3 billion pounds) bid from June this year undervalued Altran.
Capgemini CEO Paul Hermelin said in an interview that he believed the IT services and consultancy group would manage to get 50.1% of Altran shareholders behind the deal at the current offer price, which would not be altered.
“It will not change,” he said, adding that Capgemini thought it was a fair value after having had access to Altran’s books. “We saw things we liked and others we liked less.”
Capgemini is hoping the deal will add to its services in industries from telecoms to aerospace, and bring large cost savings. Its offer represented a 22% premium to Altan’s share price on the day it was announced.
The company has outlined a self-imposed threshold to get backing from just over half of Altran’s investors. Below this point, Capgemini will let the deal go and study other acquisition targets, Hermelin said.
“At that stage we’d walk away and do something else,” Hermelin said. “I have lots of other ideas. The digital industry is full of opportunities.”
Hermelin said he was prepared to meet Elliott representatives to discuss the Altran deal, if they had something new to discuss.
Elliott declined to comment.
Capgemini’s Altran takeover also faces other hurdles, such as a legal challenge filed in Paris by representatives of Altran’s minority shareholders, including Elliott, taking issue with some of the formalities around the deal.
A court hearing is scheduled for Dec. 4 to examine that claim, which could lead Capgemini’s offer to be suspended for at least five months for a longer review.
“We’ll see then what we do,” Hermelin said.
(Reporting by Gwenaelle Barzic and Mathieu Rosemain; Writing by Sarah White; Editing by David Goodman and Jane Merriman)