Airbus drops offer for stake in Atos unit, shares tumble

PARIS (Reuters) -Airbus has decided not to make an offer for a minority stake in Atos' soon-to-be spun-off division Evidian, sending shares in the French IT firm down more than 15%.

In a statement on Wednesday, the world's largest planemaker said the purchase of a 29.9% stake in Evidian "does not meet the company's objectives in the current context and under the current structure."

A person familiar with the talks said Airbus reckoned that financial conditions had not been met for the deal originally being discussed but that it still believed in some form of partnership with Atos.

Evidian regroups Atos' most coveted assets such as cybersecurity division BDS and supercomputers, and Airbus CEO Guillaume Faury had said last month a deal would have made sense because aerospace was increasingly driven by big data, connectivity and high-power computing.

Atos, whose clients include France's administration and army, would have in return secured much-needed investment as it strives to carry out its split-up plan after a troubled period marked by a governance crisis, heavy losses and sharp stock price swings.

Its shares plunged on Wednesday after news that Airbus was dropping out of the Evidian deal to close 16.75% lower.

"Atos takes note of Airbus' decision to no longer pursue the discussions it initiated in February 2023," it said in a separate statement.

"Atos confirms it will, with Airbus, explore other options and pursue the work on the long-term strategic and technological partnership between Airbus and Evidian which has the potential to create significant value for both companies."

A deal would have made Airbus the No. 1 investor Evidian.

Atos values the unit at about 7 billion euros ($7.60 billion), including a 3- billion-euro debt, a source familiar with the matter had told Reuters in February.

At that valuation, a 29.9% share stake in Evidian would have a price tag of 1.2 billion euros.

Atos rejected last September an unsolicited offer from rival onepoint and UK private equity fund ICG at an indicative enterprise value of 4.2 billion euros ($4.1 billion).

After news that Airbus dropped out, onepoint Chairman David Layani said his team was "totally mobilised" and studying all options for a possible acquisition of Evidian.

($1 = 0.9213 euros)

(Reporting by Benoit Van Overstraeten, Tim Hepher and Blandine HenaultWriting by Silvia AloisiEditing by Mark Potter)