Analyst Note| Tancrede Fulop, CFA |
As its shares trade at a 10-year high, Veolia launched a EUR 2.50 billion rights issue to fund the acquisition of 70.10% of Suez it does not hold. The amount is in line with what the company guided at its first-half results late July. However, it is above our EUR 2 billion assumption. All in all, the negative valuation impact is not material so we maintain our EUR 30 fair value estimate--along with our no-moat rating--which offers limited upside to the theoretical ex-rights share price of EUR 28.04.