Veolia Environnement SA (VIE), the biggest water utility, rose the most in three weeks in Paris trading on a report that French state-controlled subway and rail companies are interested in Veolia’s transport business.
The Paris transit system Regie Autonome des Transports Parisiens, or RATP, and the national rail company Societe Nationale des Chemins de Fer Francais, or SNCF, are in talks to acquire the Transdev assets, Le Figaro reported, citing RATP President Pierre Mongin.
Veolia climbed as much as 5.2 percent and closed 2.8 percent higher, the biggest gain since Aug. 16, at 8.659 euros. The shares are worth about a third of the 24.26 euros reached on Feb. 17, before a reorganization plan was announced five months later.
Chief Executive Officer Antoine Frerot is restructuring Veolia by selling assets, cutting debt and curbing the global reach of the utility in a bid to boost profit. Frerot fought off a bid to oust him earlier this year and has overseen the sale of the U.K. regulated water, U.S. waste management and Baltic waste businesses.
Frerot has said he wants out of the transport business since a plan for an initial public offering of Transdev was shelved.
Selling Veolia’s stake in the Transdev unit it jointly owns with France’s state-controlled Caisse des Depots et Consignations has proved more difficult. Frerot said on Aug. 2 that a potential acquirer’s bid was rejected.
The RATP and SNCF have “agreed” to acquire some of the assets, Le Figaro quoted Mongin as saying yesterday at RATP’s results news conference.
A spokeswoman for Veolia wasn’t available for immediate comment. RATP and SNCF officials didn’t return phone calls.
Frerot last month declined to reveal the names of “new partners” that could be taking part in talks on Transdev and said he didn’t know whether a deal could be reached by the end of the year.
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