(Bloomberg) -- Suez SA won a court ruling in its battle with Veolia Environnement SA that lifts an order temporarily preventing it from activating a so-called poison pill to frustrate its rival's hostile takeover bid.
A court outside Paris said that there were no grounds for an emergency injunction issued in November that blocked Suez from taking advantage of mechanisms designed to thwart a takeover. The judges, however, only ruled on whether Veolia was entitled to interim measures to block the poison pill until the next shareholders meeting, and a full hearing on the request will take place at a later date.
The ruling still provides a boost for Suez, which had suffered several court setbacks in the last five weeks as part of its all-out fight for survival. Veolia ramped up the tension last month by making a hostile takeover offer for the French utility after months of being rebuffed by Suez's management.
Veolia already bought a 29.9% stake in Suez last year for 3.4 billion euros ($4.1 billion). Suez's management is still opposed its rival's bid of 18 euros per share but Veolia Chief Executive Officer Antoine Frerot said Wednesday he's certain his bid will prevail.
Thursday's lawsuit focuses on a Dutch foundation in which Suez hopes to place its French water operations. If that structure is ultimately approved, it would make it difficult for Veolia to address possible antitrust concerns about the size of a merged company by selling Suez units.
Suez said after the ruling that the Dutch foundation was legitimate and in the best interests of shareholders and employees. The foundation “has already allowed for an improvement in the terms of Veolia's offer,” Suez said. Veolia representatives didn't immediately respond to requests for comment.
The judges said in their ruling that Veolia failed to prove there was an immediate threat that the poison pill measures might become irrevocable at the time of the November ruling as Suez specified it could only be activated in case of a change of ownership.
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