The Cleanaway Waste Management Ltd (ASX: CWY) share price is flat today, despite comments reported by the Australian Financial Review this morning from its competitor, Veolia.
This comes after Cleanaway announced on Thursday last week that it is in discussions with Suez to acquire its Australian operations.
Veolia warns of French takeover law violations
For some context, both Veolia and Suez are France-based companies listed on the Paris Stock Exchange.
Veolia has been duking it out with Suez since October last year. Around this time, Veolia acquired a 29.9% stake in Suez via another shareholder, power group Engie.
This bid through an external shareholder was not to Suez's liking, referring to it as a hostile takeover. Since then, Suez has been moving to block the acquisition.
Veolia's Chief Operating Officer Estelle Branchlianoff informed the AFR that he had sent a letter to Cleanaway specifying the legal ramifications the deal with Suez could instigate. On top of that, Veolia's CEO warned of a "legal black hole" if it goes to the courts.
It seems that Veolia is trying to do a duty of service to Cleanaway shareholders, by informing them of the risks. However, shareholders should be mindful of the conflict of interest for Veolia, given it doesn't want the deal to go forward.
So, is it all a bluff? Well, from the Australian Competition and Consumer Commission (ACCC), it looks to hold some weight.
Will it be another TPG-Hutchinson nail biter?
You may recall the TPG Telecom and Hutchinson Vodafone merger. In May 2019, the ACCC opposed the merger of the third and fourth-largest telecommunication operators in Australia. It was nearly a year when Federal Court overturned the ACCC decision and gave the merger the thumbs up.
Now back to Cleanaway and Suez. The ACCC has stated that it will undertake a full public review if the acquisition goes ahead.
The question is then whether shareholders will have the stomach for watching the ups and downs of the ACCC's review?
Cleanaway share price recap
The Cleanaway share price has held steady over the last year. Shareholders have enjoyed the stream of dividends and the 8.8% share price appreciation. Given the necessary nature of waste management, the business was, for the most part, unaffected by the year's interruptions.
At the time of writing, the Cleanaway share price is flat at $2.32 a share, with a market capitalisation of $4.77 billion.
